SBS TRANSIT LTD LOCKDOWN BUT NOTSHUTDOWN

ANNUAL REPORT 2020 We’ve been busy this entire time ANNUAL REPORT 2020

In a pandemic,“ the health and safety of our commuters and staff takes on new significance. We stepped up the cleaning and disinfection

of our buses and trains, bus interchanges and Mass Rapid Transit (MRT) stations“ as well as our depots and offices.

LIM JIT POH CHAIRMAN, SBS TRANSIT LTD

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OUR VISION Moving people in a safe, reliable and affordable way.

OUR MISSION To achieve excellence for our customers, employees, shareholders and community. To this end, we are committed to delivering safe and reliable services at affordable prices, being an employer of choice, creating significant shareholder value and becoming a socially responsible corporate role model.

OUR CORE BELIEFS To achieve our Vision and Mission, we are guided by the following beliefs:

We will: • Be driven by our customers’ needs • Strive for excellence in everything we do • Act with integrity at all times • Treat people with fairness and respect • Maintain safety as a top priority • Collaborate with our partners for a win-win outcome • Give our shareholders a reasonable return

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CONTENTS

4 Chairman’s Statement 14 Group Financial Highlights 16 The Impact of COVID-19 36 Bits & Bytes 53 Corporate Information 54 Board of Directors 60 Key Management 65 Operations Review 74 Sustainability Report 84 Corporate Governance 104 Directors’ Particulars 108 Risk Management 112 Financial Calendar 113 Financial Statements 114 Directors’ Statement 118 Independent Auditor’s Report 122 Statements of Financial Position 124 Group Income Statement 125 Group Comprehensive Income Statement 126 Statements of Changes in Equity 128 Group Cash Flow Statement 129 Notes to the Financial Statements 173 Share Price Movement Chart 174 Shareholding Statistics 176 Notice of Annual General Meeting 185 Additional Information on Directors Seeking Re-Election Proxy Form

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As a public“ transport operator offering an essential service, we were one of the few companies that continued to operate despite the lockdown.

We made changes

to the way we delivered our“ services in a new setting.

PG 4 ANNUAL REPORT 2020 CHAIRMAN’S STATEMENT

2020 was a year unlike any other. The of 2020, the Land Transport Authority COVID-19 virus outbreak caused a global (LTA) reported that average daily ridership pandemic, halting countries in their tracks for buses and trains fell by 34.5% to 5.04 and raising panic in communities the million – marking an 11-year low. world over. Singapore was not spared with our Government describing it as the “crisis The donning of masks outside of the of a generation”. As a public transport home became mandatory. For this operator offering an essential service, purpose, the LTA deployed Transport we were one of the few companies Ambassadors to bus interchanges and that continued to operate despite the MRT Stations. The Transport Ambassadors lockdown. We made changes to the way worked closely with our frontline staff to we delivered our services in a new setting. ensure commuters observed the strict rules. Enforcement was not always easy COVID-19 VIRUS OUTBREAK and there were several instances where In a pandemic, the health and safety of our Bus Captains (BCs) were abused our commuters and staff took on new as they carried out mask enforcement significance. We stepped up the cleaning activities. We did not take this lightly and disinfection of our buses and trains, and put our support fully behind our bus interchanges and Mass Rapid Transit people if they chose to take civil action (MRT) stations as well as our depots against the perpetrators, including and offices. We also piloted the use of engaging lawyers and paying their fees. Electrostatic Disinfectant Spray (EDS) The National Transport Workers’ Union technology on our buses and trains that (NTWU) also initiated a Memorandum of could keep the virus at bay for about six Understanding (MOU) with all the public months. A trial using a protective shield transport operators to provide necessary at the Bus Captain’s cabin was also support, including legal action, to public undertaken. transport workers who were assaulted. We are grateful that the Authorities have also The well-being of our people, both acted swiftly against the abusers. mental and physical, was a key concern as the pandemic raged. We supported When the Malaysian authorities all our frontline employees by providing announced the Movement Control Order them with masks, personal hand and closed the Causeway suddenly in sanitisers, vitamin C tablets, a constant March 2020, we acted quickly to secure supply of fresh fruits and care packs to accommodation for our staff who help them stay healthy and maintain commuted daily between Singapore and morale. Temperature checks were also Johor Bahru. We negotiated with hotels conducted twice a day. In August, our bus for reduced rates and tried our best to employees were tested for the COVID-19 make sure that the sudden move which virus and from January 2021, many of essentially tore them from their families our employees from both the bus and rail back home was as painless as possible. divisions opted to be vaccinated under the Close to 1,800 of them chose to stay on national vaccination programme. in Singapore and their decision helped to keep our public transport services Working with the Authorities, we operating without any disruption. implemented Safe Distancing Measures (SDM) throughout our premises. During I am especially heartened by the the Circuit Breaker (CB) period from 7 overwhelming outpouring of care and April to 1 June 2020, we marked up the support for our frontline staff by the requisite one-metre distance guideline schools and community groups who have on our entire fleet of vehicles too. During taken time and effort to cheer our staff on this period, public transport ridership with care packs and kind words. plunged drastically with our average daily rail ridership dropping by as much as 86% At the national level, we lent our support as working from home became the norm. by operating five dedicated buses (COMET While ridership subsequently picked up in MAXI) that have been specially retrofitted the following months, it still did not rise to facilitate the mass transfer of COVID-19 to its pre-COVID-19 level. For the whole related persons between facilities. At our

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CHAIRMAN’S STATEMENT

interchanges, we provided free space to the national Emerging Stronger Taskforce, the Temasek Foundation to place vending which has been set up to reignite the machines where Singaporeans and economy. We are involved with residents can collect their free masks. ST Engineering in these two projects. The experience gained will put us in good The Government has been very stead for future tenders in this area. sympathetic and helpful through its various assistance schemes and generous We also joined two consortiums in Supplementary Budgets. In all, the the AV Call for Collaboration (CFC) Government provided $109.8 million announced by the LTA and the Economic worth of aid to SBS Transit mainly through Development Board. the Jobs Support Scheme (JSS) to support staff salaries as we continued to keep our STRATEGIC PARTNERSHIPS buses and trains in operation in spite of Despite the challenges in the rail business, the reduced ridership. Other operating we continue to see potential in this sector. costs incurred in respect of rental reliefs In this respect, we have signed a Teaming were also provided. Agreement with the RATP Développement S.A., a French Government-owned We also played our part where our senior company and the largest rail operator staff took a 10% pay-cut for five months in Paris, to explore new business while our Board took a proportional 20% opportunities and deliver world-class cut in directors’ fees. metro services in Singapore. The signing was witnessed by the France Minister ELECTRIC BUSES Delegate for Foreign Trade and Economic It was announced in the Singapore Budget Attractiveness, H.E. Mr Franck Riester. 2021 that $30 million would be set aside over the next five years for electric vehicle We also signed an MOU with Thales, (EV)-related initiatives. Measures include a French multinational company that narrowing the cost differential between designs and builds electrical systems and EVs and combustion engine vehicles as provides services for various industries well as proliferating charging points in including transportation, to employ new private premises. I am heartened by this digital technologies to deliver a safer and announcement which will encourage more comfortable passenger journey for the adoption of EVs for a greener our MRT commuters. environment. BUS TENDERS The LTA, which owns all the public buses As reported in my Statement last year, we in Singapore, has committed to buying submitted bids for two parcels – Bulim green buses – with a view to have the Bus Package and the Sembawang-Yishun entire fleet run on cleaner energy by Bus Package – under LTA’s new cluster 2040 as part of the Land Transport system. The objective of this cluster Master Plan. Presently, there are 5,800 tendering was to give smaller operators an public buses where 40 are fully electric opportunity to win and level the playing and 50 are hybrids. Among the public field between large and small operators. bus operators, we run half of the fleet of green buses – 20 electric and 25 hybrids Though we made the lowest bids for both – on a trial basis on behalf of the LTA the individual and combined parcels, we to assess their suitability on Singapore unfortunately lost out. The contracts were roads. awarded to another operator, which had submitted the next lowest combined bid, AUTONOMOUS BUSES with the price difference of $22.0 million Of our two pilot autonomous vehicle or 2.2% over the five-year period. (AV) projects which I mentioned in my last Statement, the one in Sentosa ended In the market place today, we are still last year while the other in Jurong Island the leading operator with nine parcels or is now operating a pilot revenue service about 61% of the market share. until April 2021. This is an initiative under

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OUR PUBLIC TRANSPORT SERVICES also improved on its reliability by about For the year under review, we operated 70% over that of its performance in 2019. 226 bus routes, which were three more than in 2019. Our 3,193 scheduled buses A more detailed report of our public out of a holding fleet of 3,531 buses transport operations and services can be included 25 hybrid buses and 20 EVs. found elsewhere in this annual report. All our buses are wheelchair accessible with close to 57% being single deck CUSTOMER ENGAGEMENT AND SATISFACTION ones. Garaged in seven bus depots and The COVID-19 situation did not dampen a bus park, we operate from 17 bus our efforts in engaging our commuters. interchanges and 14 bus terminals. On We conducted several engagement an average weekday, we operated about sessions with some 40 commuters who 31,000 bus trips during the year. are physically or visually handicapped and their caregivers through their social In November 2020, we re-organised service agencies to find out more about our bus division to better support our their travelling experiences. This was to operational needs by setting up a new better understand their challenges and Bus Development Division. This new find ways to address them. division focusses on Government liaison, bus tenders, bus schedules as well as data We also worked on safety campaigns analytics to keep pace with technological to contribute to pleasant journeys for developments and systems. More our elderly commuters. At the NEL importantly, it also works to expedite Chinatown Station, besides the display the induction of new processes and of posters to remind them to hold on technology and drive innovations in our firmly to the handrails on the escalators, bus operations. we also piloted public announcement safety messages in Chinese dialects – In rail services, we continued to operate Hokkien and Cantonese – besides English 83 km of rail networks in Singapore – the and Mandarin. In 2020, there were zero North East Line (NEL), Downtown Line injuries arising from the improper use (DTL) and the Sengkang-Punggol Light Rail of the escalator that was involved in the Transit (SPLRT) systems. We operate 78 pilot. We will continue to look at other stations with a fleet of 192 trains and have creative ways to encourage and remind a current market share of 30.6%. All the our elderly commuters to make travel stations on our rail networks are open for safe and pleasant for them. On buses passenger service except one – Teck Lee on and at our bus interchanges, we put up the Punggol LRT system – which will open posters to remind commuters to hold in tandem with developments in the area. on to support at all times to reduce the incidence of bus falls among the elderly. At the peak of the COVID-19 crisis, we suffered an 86% drop in passenger load. In DIGITALISATION AND DIGITAL TRANSFORMATION December 2020, ridership was just 72.7% We have been actively changing the way of what was registered a year earlier. we operate by digitalising our bus and rail operations and maintenance, and in In train service reliability, our lines the process, improved existing systems/ performed better than the industry during processes and enhanced productivity. the year under review. For 2020, the DTL This has also transformed the way we achieved a Mean Kilometre Between communicate with our staff, measure and Failure (MKBF) of 2.09 million train-km improve performance, and monitor and while the NEL clocked 2.04 million manage information. train-km, both of which outperformed the nationwide MRT network’s average We introduced e-services for our 6,200- of 1.45 million train-km. In fact, the DTL odd BCs, enabling them to use their improved on its reliability by about 83% handphones for a host of administrative and the NEL by some 48% over their functions such as checking on work 2019 performances. The SPLRT achieved rosters and payslips, applying leave, 426,000 train-km compared to the LRT’s reporting bus faults and even viewing network average of 227,000 train-km. It of personal driving competency on the

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CHAIRMAN’S STATEMENT

trips performed. Besides these, our BCs all have a responsibility to make fair and also receive company news, safety alerts accountable decisions, regardless of and advisories on their phones. Likewise, whether we are shareholders, authorities, supervisors too are able to monitor the directors or management. BCs’ driving competency and undertake coaching and supervision electronically. The megatrend of sustainable development will gain momentum. We We have also changed our work must therefore integrate sustainability into processes and work flows in our our business strategy. workshops by going digital which has enhanced productivity. In 2020, we Our Ulu Pandan Bus Depot was conferred tested several solutions to strengthen the Green Mark Platinum (Super Low our condition monitoring capabilities for Energy Building) Award by the Building critical systems in various areas such as and Construction Authority in February rolling stock, signalling and power with 2020 in recognition of our environmental the objective of boosting our rail reliability efforts that included the use of solar through pre-empting faults. We also panels, green roofs and NEWater in our rolled out another new digital platform for operation. Across our bus operations, we our rail commuters to provide feedback were intentional in how we could reduce via QR codes. the use of our resources. This has resulted in 15% less electricity consumed and 16% SUSTAINABILITY less water used while our carbon dioxide We live and work in a global ecosystem. emissions decreased by 9% compared Everything we do has a knock-on to 2019. effect – be it on someone else, on the environment or on society at large. We Our efforts were also recognised by the Singapore Environment Council which presented us with the Elite Award, the highest tier in the Eco-Office Plus Certification. Our corporate office and all our depots – eight bus depots and three rail depots – each received the award for implementing environmentally friendly practices at the workplace. We were also We live and work in one of 12 companies in Singapore to be “ accredited with the GreenDNA Award a global ecosystem. which uses an internationally recognised Everything we system under the United Nations’ Environment Programme (UNEP) to fight do has a knock- the global climate crisis.

on effect – be it on In bus safety, there were zero fatal

accidents in 2020 compared to one in someone else, on the 2019. As at December 2020, our accident “ rate was 0.09 cases or 220 accidents per environment or on 100,000 bus-km. This was a significant improvement compared to 0.12 cases or society at large. 310 accidents in 2019.

Our good safety records were recognised by the LTA. Our DTL was honoured with the “Safe Rail Line of the Year (Excellence)” award - which it won twice in the award’s three year history - while SBS Transit’s Tampines Bus Package received the merit award in the “Safe Bus Operator of the Year” category.

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In 2020, we had 10,670 employees of We are thankful for the Government whom more than 6,200 were BCs. In Grants of $109.8 million, which came terms of nationality among our BCs, mainly from the wage subsidy under the 50% are Singaporeans and Singapore JSS, without which the Group would Permanent Residents, 41% Malaysians and have recorded an operating loss of $29.8 the rest Chinese nationals. million for 2020. As a result, Group Operating Profit dropped by 22.7% from In spite of the pandemic, we continued to $103.5 million to $80.0 million. recruit BCs for operational requirements. A new recruitment campaign - “Make A The Government Grants significantly Difference, Everyday” - was launched with cushioned the adverse financial impact the focus on building a strong local core. due to COVID-19 where we experienced a As at 31 December 2020, we successfully significant drop in revenue from reduced recruited more than 550 Singaporeans ridership and operating mileage, rental and Permanent Residents including 133 rebates given to tenants and reduced former taxi drivers and private hire drivers advertising especially during the CB who had switched careers due to the period. While ridership has steadily pandemic. improved, it remained lower than pre- COVID-19 days, and Other Commercial COVID-19 did not dampen our plans for Services continued to be depressed. In our CARES Kindness Month as we took addition, higher operating costs were due the digital route in inviting the schools to mainly to costs incurred for enhanced show their appreciation to our staff. In all, cleaning and disinfection of our buses, we received close to 2,000 appreciation trains, interchanges, stations and depots, notes/videos in November 2020. subsidising the cost of accommodation for Malaysian staff affected by Malaysia’s A more detailed write up on our Movement Control Order which sustainability efforts can be found commenced since 18 March 2020 and in the Sustainability section of this increased allowance for rail inventory Annual Report. Our parent company, obsolescence. ComfortDelGro, has also produced a comprehensive Sustainability Report. Consequently, Group profit before taxation was 22.5% or $22.4 million lower from FINANCIAL PERFORMANCE $99.4 million to $77.0 million. Tax credit I expect that Shareholders will understand was $1.9 million due mainly to the tax that these are unprecedented times. exemption for the receipt of JSS and the resultant loss position as compared to the Group Total Revenue for 2020 decreased tax expense of $18.1 million incurred in by 14.8% from $1,445.2 million to $1,230.9 2019. million. Earnings per share was 25.32 cents, Revenue from Public Transport Services which was 2.9% lower than 2019’s 26.07 (bus and rail) decreased by 13.6% or $187.5 cents. The net asset value per share was million to $1,195.8 million, which can be $1.88 compared to $1.69 in 2019. As at attributed mainly to lower service fees 31 December 2020, total equity for the from lower fuel indexation and operated Group increased by 11.4% from $526.7 mileage coupled with lower rail ridership, million to $587.0 million due mainly to offset by the Rail Reliability Incentive profits generated from operations which achieved. was offset by the payment of dividends.

Revenue from Other Commercial Services Management undertook a worst case also dropped by 43.3% from $62.0 million scenario planning exercise in cash flows to $35.1 million due mainly to lower and resolved not to commit any capital advertising revenue as lesser rail and bus expenditure which were not mission campaigns were rolled out during the critical to conserve cash. The Board of COVID-19 outbreak while rental rebates Directors was fully updated. As at 31 were given to tenants. December 2020, the Group had short- term deposits and bank balances of

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CHAIRMAN’S STATEMENT

$85.6 million. After accounting for the announcements, SBS Transit continued borrowings of $25.0 million, the Group to do well by advancing its score from 87 was in a net cash position of $60.6 million. to 106 to be ranked in the 17th spot from The Group’s gross gearing ratio (excluding its previous 40th position. This placed lease liabilities arising from adoption of us in the top 3% among the 577 listed SFRS(I) 16) was 4.4% when compared to companies in 2020. 14.6% in 2019. Our market capitalisation as at 31 As recovery is still uncertain, the Board December 2020 was $950.9 million, has proposed a first and final dividend which was a dip of $243.5 million or of 6.3 cents per share. This is 25% of the 20.4%. It also fell below the $1 billion- profit attributable to Shareholders as a mark which was attained in 2019. Among show of the Company’s appreciation the 706 listed companies on the SGX, we for Shareholders’ support. Against the were ranked in the 88th spot compared to year-end closing price of $3.05, the yield our 91st position in 2019. is 2.1%. These are extraordinary times and I hope Shareholders understand and Quarterly reporting ceased from 7 appreciate the position. February 2020. We, however, continued to provide some basic financial figures as CORPORATE GOVERNANCE substitutes in the first and third quarters to The nine-year rule for Independent keep Shareholders and investors informed Directors will come into effect on 1 of our progress. As a result of restrictions January 2022. The Singapore Exchange imposed by the COVID-19 crisis, our (SGX) Rules stipulate that Directors who AGM was held virtually through electronic have accumulated a total of nine or more means. It was not entirely satisfactory years in their tenure on 1 January 2022 as we were not able to mingle with our will be classified as non-independent Shareholders after the meeting as we had unless prior approvals have been done in the past. Come 29 April 2021, we obtained from Shareholders. Two of our will be conducting the AGM proceedings Independent Directors in SBS Transit fall via webcast and in-person so that there into this category but one is retiring at the will be some interaction between the upcoming 2020 Annual General Meeting Shareholders and the Board. Subject to (AGM). the prevailing national guidelines and regulations, the number of Shareholders This demonstrates that the Board has a who would be able to attend in person good spread of people with experience will be limited. It is my hope that the and deeper knowledge of the business pandemic will soon be contained and we to facilitate Board renewals when new will be able to hold our AGM physically for directors are brought in. all Shareholders.

In its latest report released in March 2020, OUTLOOK the Council for Board Diversity reflected Despite the ongoing vaccination efforts that the pace of increase of women and gradual resumption of the economy, directors slowed down from previous the global COVID-19 situation remains years. Among the 100 largest listed fluid. There is uncertainty over the easing companies in SGX, women on average of health and safety measures and the made up 16.2% of directors as at end pace of a global vaccine roll-out. Hence, of 2019. I am pleased to advise that our we shall continue to adopt a cautious percentage in SBS Transit is of the order outlook for the new financial year. of 30% with three female directors, well above the target stipulated by the Council. We will need to further accelerate the pace of our digital transformation to In the 12th Annual Governance and enjoy greater cost efficiencies and further Transparency Index Survey 2020 which improve the reliability of our operation in assessed listed companies on corporate serving commuters better. Concurrently, governance disclosures and practices, we will look at restructuring to achieve as well as timeliness, accessibility and optimisation in the deployment of transparency of their financial results our human capital. This will make our

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organisation most efficient and effective role of government, style of working in responding to the demands in our fast arrangements and future black swans evolving operating environment. including pandemics will be reviewed and Our public transportation must also work debated. towards being more inclusive of those with physical and visual disabilities as well RETIREMENT as invisible disabilities. For 2021, we will As you will have read from the Notice of dedicate efforts in doing more to promote AGM, I will not be seeking re-election this inclusivity. year. I have been SBS Transit Chairman since 2003, following the merger of Our BC recruitment will continue to focus Comfort Group and DelGro Corporation. on increasing the number of Singaporeans But my time with the Group goes back and Permanent Residents. We will also to 1997 when I was a Director with SBS be involved in a Tripartite Task Force to before its restructuring, and then DelGro develop a set of common key employment Corporation after. terms and conditions for affected BCs to enable their seamless transit to another But, I believe the time is right for me to public transport operator under the Bus hand over the reins to a new Chairman Contracting Model. who will lead the Group through its next phase of growth. This is part of the DIRECTORS renewal of the Board which began four Our Director renewal process, which years ago. The Board, as it stands now, began in 2017, has taken its planned is well balanced in terms of tenure, age path well. The Board of 10 Directors and gender. The strength and expertise made up of especially newer Directors that is currently in place will be well is well balanced in terms of tenure, age placed to ensure that SBS Transit grows and gender. They are experts in a whole from strength to strength going forward. gamut of key fields including technology, engineering, accountancy, law and the The public transport sector is a tightly media. They are also well represented in regulated industry which is undergoing terms of tripartite experience from the transformation amidst a changing government, labour and business sectors. environment. New technologies, coupled with changing commuter needs and With the nine-year rule coming into effect demands, are challenges that we, as in January 2022, Professor Lim Seh Chun operators, face. To ensure continuity, will be offering himself for re-election I will stay on as Senior Advisor as Board at the forthcoming AGM in April 2021 and Management work together to meet as independent director for continuity. the present challenges. Professor Lim has discharged his duties with integrity and competence and the APPRECIATION Board is confident that he will continue to Management has been under great stress remain objective and act independently in ever since the start of the pandemic. all Board deliberations. I seek your support Besides managing our business, in the re-election of the retiring director. Management had to be concerned with the well-being of not only our staff but Mr Benny Lim and Mr John De Payva will also our commuters, partners and other be retiring at the AGM having reached stakeholders. Civilisation as we know it is the end of their term under the normal under threat and we have to play our part. rotation rules. They will not be seeking re- elections at the forthcoming AGM. We are On behalf of the Board of Directors, I wish very grateful to them for their unstinting to thank the Management and staff under contributions to the Company. the capable leadership of Mr Yang Ban Seng, Deputy Chairman and concurrently We shall be having our Directors’ Biennial the Managing Director and Group CEO of Retreat with Senior Management in 2021. ComfortDelGro, the parent company of This is very timely in the light of COVID-19. SBS Transit, for doing an excellent job in Significant topics in new business models, keeping the morale high. enhanced role of technology, expanded

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Our“ public transportation must also work towards being more inclusive of those with physical and visual disabilities as well as invisible

disabilities. For 2021, we will dedicate efforts to doing mor“ e to promote inclusivity.

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I would also like to thank Ban Seng for providing guidance and astute counsel to Mr Cheng Siak Kian, who has just been appointed CEO of SBS Transit. I also wish to thank Siak Kian in reorganising and motivating the staff during this difficult period.

Special thanks go out to all our frontline staff who put their own health on the line as they go about their daily work to keep Singapore moving.

I also wish to thank the Government and the Authorities for all their assistance, financial and otherwise, in helping us through these difficult times. I also wish to express my deepest appreciation to the National Transport Workers’ Union for working closely with us. I am also thankful to the schools and community groups who have rallied behind our frontline staff with their show of care and support. Teamwork has been strong throughout the crisis and it has helped make a very difficult situation slightly less challenging.

I would also like to thank my fellow Directors for their invaluable contributions during this difficult time. And finally, to our Shareholders, thank you for your continued support.

It is my hope that 2021 will be a better year as we continue to face the pandemic.

LIM JIT POH Chairman MARCH 2021

PG 13 SBS TRANSIT LTD GROUP FINANCIAL HIGHLIGHTS

REVENUE PROFIT ATTRIBUTABLE TO SHAREHOLDERS

($’mil) ($’mil) 1,445.2 1,500 90 1,383.3 80.1 81.3 79.0 1,191.8 1,230.9 75 1,200 1,098.0

60 900 47.1 45 600 31.4 30

300 15

0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

EARNINGS PER ORDINARY SHARE NET ASSET VALUE PER ORDINARY SHARE

(cents) (cents)

28 200 188.23 25.72 26.07 25.32 168.90 24 159.91 150 144.41 20 134.72

16 15.17 100 12 10.12

8 50

4

0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

TOTAL DIVIDEND PER ORDINARY SHARE VALUE-ADDED PER EMPLOYEE

(cents) ($’000) 15 100 13.05 87.3 87.5 12.90 82.9 12 80 74.8 74.4

9 60 7.60 6.30 6 5.05 40

3 20

0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

INTERIM FINAL

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SBS TRANSIT GROUP FINANCIAL SUMMARY

2016 2017 2018 2019 2020 Revenue ($’mil) 1,098.0 1,191.8 1,383.3 1,445.2 1,230.9 Operating costs ($’mil) 1,056.3 1,132.5 1,286.0 1,341.7 1,151.0 Operating profit ($’mil) 41.8 59.3 97.3 103.5 80.0 Profit attributable to 31.4 47.1 80.1 81.3 79.0 shareholders ($’mil) EBITDA ($’mil) 123.4 156.3 190.4 207.6 189.0 Issued capital ($’mil) 97.1 98.9 100.2 100.5 100.5 Capital and reserves ($’mil) 418.0 449.2 498.4 526.7 587.0 Capital disbursement ($’mil) 23.5 35.0 27.8 29.0 18.3 Return on shareholders’ equity (%) 8.3 10.9 16.9 15.9 14.2 Earnings per ordinary 10.12 15.17 25.72 26.07 25.32 share (cents) Net asset value per ordinary 134.72 144.41 159.91 168.90 188.23 share (cents) Interim dividend per ordinary 2.35 3.65 5.80 7.15 0.00 share (cents) Final dividend per ordinary 2.70 3.95 7.10 5.90 6.30 share (cents) Total dividend per ordinary 5.05 7.60 12.90 13.05 6.30 share (cents) Dividend cover (number of times) 2.0 2.0 2.0 2.0 4.0

VALUE-ADDED FOR THE GROUP

2016 2017 2018 2019 2020 $’000 % $’000 % $’000 % $’000 % $’000 % Suppliers of capital 15,803 2.2 24,224 3.0 33,765 3.7 48,686 5.2 21,647 2.8 – dividends and term loan interest Taxation to the 24,582 3.4 27,205 3.4 32,066 3.5 28,731 3.1 7,488 1.0 government Retained earnings 102,976 14.2 124,977 15.5 143,139 15.7 141,266 15.2 171,207 21.8 Employees – 581,143 80.2 628,553 78.1 705,519 77.1 713,354 76.5 583,342 74.4 salaries and other staff costs Total value-added 724,504 100.0 804,959 100.0 914,489 100.0 932,037 100.0 783,684 100.0 Number of employees 9,692 9,709 10,475 10,657 10,534 Value-added per employee ($’000) 74.8 82.9 87.3 87.5 74.4

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COVID-19 THE PANDEMIC HALTED US IN OUR TRACKS AND SENT THE NATION INTO A TAILSPIN.

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FOOTFALL FELL

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SEATS EMPTIED

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THE STREETS WENT QUIET

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SOCIAL DISTANCING

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BECAME THE BUZZWORD DURING THIS PANDEMIC

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SBS TRANSIT’S HAS BEEN ON HELPING OUR EMPLOYEES, CUSTOMERS AND OTHER STAKEHOLDERS WEATHER THIS UNPRECEDENTED STORM IN THE SAFEST WAY POSSIBLE

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S KEY FOCUS HAS BEEN ON HELPING OUR EMPLOYEES, CUSTOMERS AND OTHER STAKEHOLDERS WEATHER THIS UNPRECEDENTED STORM IN THE SAFEST WAY POSSIBLE

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THE CLEANLINESS OF OUR VEHICLES AND PREMISES BECAME A KEY PRIORITY

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WE KEPT OUR STAFF MORALE HIGH

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KEEPING COMMUTERS INFORMED

SAFE

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AND ENCOURAGED

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TOGETHER WITH DETERMINATION AND PERSEVERANCE, WE ARE CONFIDENT WE WILL EMERGE STRONGER

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TOGETHER WITH DETERMINATION AND PERSEVERANCE, WE ARE CONFIDENT WE WILL EMERGE STRONGER

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COVID-19 As a public transport operator offering an essential service, we continued to run our bus and train services despite the lockdown. Ridership, however, was severely hit as strict social distancing measures were implemented including the work-from-home advisory. For the whole of 2020, the Land Transport Authority (LTA) reported that average daily ridership for buses and trains fell by 34.5% to 5.04 million – marking an 11-year low.

At the peak of the crisis, during the Circuit Breaker (CB) period from 7 April to 1 June 2020, we worked with the LTA to operate our buses and trains at reduced frequency.

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BUS AND TRAIN SERVICES

Selected bus routes were suspended including the two Chinatown Direct and six Nite Owl services as well as 12 Express and six City Direct bus services that serve the Central Business District. In all, 29 bus services were suspended during the CB period with the Express and City Direct bus services resuming operations from 1 June 2020.

The two cross-border services – 160 and 170 – have also ceased operating across the Causeway due to the border closure.

During the CB period, trains on the North East Line (NEL), Downtown Line (DTL) and Sengkang-Punggol Light Rail Transit (SPLRT) systems ended service earlier by about half-an-hour every day. To better match demand with supply and optimise resources given the fall in ridership, train intervals on the DTL also increased from 21/2 to 31/2 minutes during peak periods.

In spite of the border closure which prevented the daily commute of our employees across the Causeway, our bus and train services were not affected. We were able to operate without any disruption as close to 1,800 staff, who were residents of Johor Bahru, chose to stay on in Singapore while we helped to secure their accommodation at local hotels.

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COVID-19

ENHANCED CLEANING AND DISINFECTION The health and safety of our commuters and staff took on new significance. We stepped up the cleaning and disinfection of our buses and trains, bus interchanges and MRT stations as well as our depots and offices.

We also piloted the use of Electrostatic Disinfectant Spray (EDS) technology on our buses and trains that could keep the virus at bay for about six months.

Meanwhile, hand sanitisers were also made available at our bus interchanges and MRT stations for commuters’ use.

MASKING UP The donning of masks outside of the home became mandatory. For this purpose, the LTA deployed Transport Ambassadors to bus interchanges and MRT stations. The Transport Ambassadors worked closely with our frontline staff to ensure commuters observed the strict rules. Enforcement was not always easy and there were several instances where our Bus Captains (BCs) were abused as they carried out mask enforcement activities. We did not take this lightly and put our support fully behind our people if they chose to take civil action against the perpetrators, including engaging lawyers and paying their fees.

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CARE FOR PUBLIC TRANSPORT WORKERS’ WELL-BEING We supported our frontline employees by providing them with masks, personal hand sanitisers, vitamin C tablets, a constant supply of fresh fruits and care packs to help them stay healthy and maintain morale. Temperature checks were also conducted twice a day.

In August 2020, our bus employees were TRIAL OF PROTECTIVE SHIELD tested for the COVID-19 virus and from A trial using a protective transparent shield January 2021, many of our employees at the Bus Captain’s cabin was undertaken from both the bus and rail divisions opted on six buses over a two-week period in to be vaccinated against the COVID-19 July 2020. Based on Bus Captains’ (BCs) virus under the national vaccination feedback, a further study is in progress programme. on the different types of anti-reflective materials to ensure that our BCs are not SUPPORTING NATIONAL PROGRAMMES distracted while driving. At the national level, we lent our support by operating five dedicated buses (COMET SAFE DISTANCING MEASURES MAXI) that have been specially retrofitted Working with the Authorities, we to facilitate the mass transfer of COVID-19 implemented Safe Distancing Measures related persons between facilities. At our (SDM) throughout our premises. During interchanges, we provided free space the Circuit Breaker period from 7 April to to the Temasek Foundation to place 1 June 2020, we marked up the requisite vending machines where Singaporeans one-metre distance guideline on our and residents can collect their free entire fleet of vehicles too. masks periodically.

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BITS & BYTES HARNESSING THE POWER OF DIGITALISATION.

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TO KEEP COMMUTERS BETTER INFORMED

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DIGITALISATION HAS POSITIVELY CHANGED THE WAY WE WORK TO ULTIMATELY BENEFIT OUR COMMUTERS

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MANAGING PERFORMANCE

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FOR SMOOTHER TRAVELS

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ENHANCING RELIABILITY

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DELIVERING GREATER EFFICIENCY

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WORKING FROM HOME

OR ON THE GO

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WE DID THESE AND MORE THROUGH THE POWER OF DIGITALISATION

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WE DID THESE AND MORE THROUGH THE POWER OF DIGITALISATION

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BITS & BYTES Realising the Power of Digitalisation At SBS Transit, we embrace technology and innovation not as a concept – but as a way of life. As a Company, we have never been averse to change. From the vehicles that we use to transport the millions of commuters every day, to the systems and processes that we have introduced to improve efficiency and productivity, we have always embraced technological innovations.

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Our commuters are at the heart of what we COMMUTER do. This is why we constantly strive to enhance our commuters’ experience by providing comprehensive information and making each EXPERIENCE journey more pleasant, safe and reliable. We also make it a point to increase our accessibility to enable them to share their feedback conveniently and for us to be able to respond more promptly. And we will continue to work hard to do more.

CONNECTING COMMUTERS TO TRAVEL SOLUTIONS

Our mobile app, SBS Transit, provides real-time information on our bus and train services to put commuters in control of their journeys. From journey planning to route information, next bus arrival timings to route diversions, station maps to MRT system maps, we have designed our app to be the travel companion for both bus and rail commuters. And we continue to enhance or add new features to make the app more user-friendly for our commuters.

PROVIDING SAFER AND MORE COMFORTABLE TRAVEL EXPERIENCE

Collaborating with Thales, a French multinational company, we are employing new digital technologies to deliver a safer and more comfortable passenger journey for our MRT commuters. For a start, a solution is in the works to detect crowdedness at stations and in trains using video analytics besides other technologies. This will provide heightened situational awareness for our staff to ease congestion more efficiently. It will also be able to detect suspicious persons or unattended baggage and even identify those who need mobility assistance. It is scheduled to be tested on the North East Line’s Woodleigh Station in the first half of 2021.

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BITS & BYTES

ENSURING SAFETY AND ENHANCING BUS SECURITY AGAINST RELIABILITY TRACK INTRUSION To improve bus reliability for our We have embarked on a commuters, we have invested in a trial using video analytics new monitoring system that uses data to trigger alerts when analytics to pinpoint problem areas intrusions are detected so that we can undertake intervention on the viaducts and efforts. To-date, we have achieved tracks of our above an improvement of up to 20% in our ground Sengkang Light performance. Rail Transit System. This is essential for the safety and security of commuters.

ENGAGING COMMUTERS ONLINE

During the pandemic, we went online to chat with some of our commuters who are visually or physically handicapped, and their caregivers. Over these sessions, we gained helpful insights into their travelling experiences that helped us look at new ways to be even more inclusive in how we deliver our services. We will continue to conduct more of these sessions regularly.

LISTENING TO THE VOICE OF THE CUSTOMER With the wide spread use of QR codes during the pandemic, we made use of this technology to offer another new and convenient platform for commuters to provide feedback about our trains and MRT stations. This brings the list of our feedback channels to seven, making us more accessible to our commuters in both the digital and physical worlds.

With regards to our commuters’ feedback, we have embarked on a journey that uses robotic process automation to perform routine administrative tasks such as registering, classifying and sending the IMPROVING feedback for investigation to the relevant departments. This not only optimises the use of manpower at the PRODUCTIVITY customer relations centre but also results in a faster rate of response to our commuters’ feedback. This system IN FEEDBACK is being developed and expected to be implemented in MANAGEMENT 2021.

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OPERATIONS & MAINTENANCE A plethora of activities have been undertaken to enable us to deliver our bus and train services smoothly to meet the expectations of our commuters. Employing technology has enabled us to monitor our systems and operational performances efficiently and allows for intervention measures to be taken to deliver reliable outcomes. We are also constantly exploring new technologies for greater operational excellence and efficiency.

On the NEL, the Integrated ROUND- Supervisory Control System (ISCS) THE-CLOCK is a key system which effectively manages the control of stations, EFFECTIVE trains, tunnels and depot. To CONTROL ensure it continues to operate smoothly, we introduced a system OF RAIL to automatically monitor the ISCS servers’ performance in keeping to its threshold setting. OPERATIONS This ensures the servers do not function at sub-optimal levels, AND FACILITIES thereby enabling us to control train operations effectively.

CENTRE OF EXCELLENCE FOR DATA ANALYTICS

To optimise the use of data analytics, DATA ANALYTICS FOR we have set up a Centre of Excellence with the Digital Office of ComfortDelGro, FLOOD CONTROL our parent company. This will help further develop our capabilities in Even in the DTL’s tunnel, we use data analytics this area which will strengthen our to monitor the duration of operation of management of train operations. the sump pumps every day. If the pumps This Centre will also drive key projects are found to be operating excessively, the in the rail division to pre-empt system maintenance team will be alerted to check failures as we work at enhancing the on the proper functioning of the valves that reliability of our train services. are used to control the discharge of water and take corrective actions if required. This ensures the availability of the pumps to prevent flooding in the train tunnel which would affect train services.

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BITS & BYTES

Our Bus Captains (BCs) are also not forgotten in our journey towards digitalisation. Using the iSafe system, we are able to monitor the driving behaviour of our BCs in providing safe and comfortable rides for our commuters. Harnessing technology as an independent assessor, the system collates data from two of our landmark systems – SAGE, a telematics system that monitors the smoothness and comfort of bus rides and Mobileye, an advanced driver assistance system that alerts the BC to potential collisions – to effectively present an independent assessment of the BCs’ driving competency. Supervisors are, in turn, able to monitor the BCs’ performance and undertake the necessary coaching IMPROVING BUS CAPTAINS’ and supervision. DRIVING COMPETENCY

“FIND MY BUS” WITHOUT ANY HASSLE

BCs are now able to easily locate their buses in the depots when they report for work early each morning to start their driving duties. With “Find My Bus”, we have removed the hassle and frustration associated with this daily task. All that is required is for the BC to scan a QR code and key in the bus registration number on the system to know the location when the bus is parked after being cleaned the night before.

AUTOMATIC TRACKING OF DIESEL CONSUMPTION

We have eliminated the need for manual entries in tracking the volume of diesel being used in our operations. With the Diesel Management System, it sends the data to a central server where reports are efficiently generated for management’s review.

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GOING PAPERLESS WITH TABLETS IN THE WORKSHOPS For efficiency, our technicians are issued tablets when performing their daily maintenance activities at our bus depots. These devices are installed with the Bus Mobile Maintenance System application which contains online maintenance checklists for the assigned tasks. Work instructions, drawings, electrical schematics, and other relevant information are also readily available on the tablets. Access to the bus manufacturers’ online portals also provide our technicians with quick access to detailed bus maintenance information. Besides work efficiency, the system also enables our workshops to go paperless.

STREAMLINING DEFECT REPORTING SYSTEMS

We have also made it easier for our employees to highlight defects in our systems, devices or infrastructure using Dr Rail on the mobile application, iLink, or the web-based Rail Corrective Maintenance System. Both systems are integrated to share the same database so that rectification works for all defects are monitored centrally for timely completion. Reports are readily generated to provide a status of the rectification works in progress to ensure nothing is missed out.

SUSTAINABILITY Technology also plays a role in our journey towards sustainability. E-SERVICES FOR BUS CAPTAINS ON THE GO Recognising that they are always on the move, we introduced e-services for our 6,200-odd BCs, enabling them to use their handphones to carry out a host of administrative functions such as checking on work rosters and payslips, applying leave and reporting incidents and bus defects wherever they are. BCs can also access their individual driving competency scores generated from iSafe to find out about their driving behaviour. Using a mobile application, iLink, our BCs are given the flexibility to perform these functions at their convenience as well as stay in touch with the Company through news, safety alerts and advisories.

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BITS & BYTES

DIGITALISING WORK PROCESSES

We changed our work processes and work flows in our bus and rail workshops by going digital which has enhanced productivity. This is a green effort that not only saves time in filing but space to store the documents.

ONLINE TRAINING FOR SKILLS DEVELOPMENT

E-learning modules continued to be rolled out but at an accelerated pace and with more areas of focus added. Training on technical skills such as security and cybersecurity awareness as well as the softer skills in commuter care and managing anger were provided. A learning application was also introduced for employees to receive training using their handphones; making access to learning new skills and knowledge convenient.

STAFF ENGAGEMENT

With the pandemic, we took the digital route to stay in touch with our people. We produced videos to inform, persuade and galvanise our workforce to keep morale high.

AUTOMATED CLEANING

We also worked with our contractor to deploy a cleaning robot to our canteen at the Ulu Pandan Bus Depot. It is constantly on the move, sweeping and mopping to keep the premises clean at all times.

PG 52 ANNUAL REPORT 2020 CORPORATE INFORMATION

BOARD OF LIM JIT POH LIM SEH CHUN DIRECTORS CHAIRMAN LEAD INDEPENDENT DIRECTOR YANG BAN SENG CHUA MUI HOONG DEPUTY CHAIRMAN JOHN DE PAYVA (RE-DESIGNATED ON 1 MARCH 2021) SUSAN KONG YIM PUI LEE SOK KOON LIM SIANG HOE, BENNY TAN KIM SIEW YU CHING MAN

AUDIT AND RISK LEE SOK KOON CHUA MUI HOONG COMMITTEE CHAIRMAN LIM SEH CHUN LIM SIANG HOE, BENNY TAN KIM SIEW

REMUNERATION SUSAN KONG YIM PUI JOHN DE PAYVA COMMITTEE CHAIRMAN LIM JIT POH YU CHING MAN

NOMINATING LIM SEH CHUN SUSAN KONG YIM PUI COMMITTEE CHAIRMAN LIM JIT POH LIM SIANG HOE, BENNY

SERVICE YU CHING MAN CHUA MUI HOONG QUALITY CHAIRMAN JOHN DE PAYVA COMMITTEE LEE SOK KOON TAN KIM SIEW

SBST TENDER LIM JIT POH CHENG SIAK KIAN COMMITTEE CHAIRMAN SUSAN KONG YIM PUI LEE SOK KOON YANG BAN SENG YU CHING MAN DEPUTY CHAIRMAN

CORPORATE REGISTERED OFFICE SHARE REGISTRAR DIRECTORY 205 Braddell Road B.A.C.S. Private Limited Singapore 579701 8 Robinson Road #03-00 Mainline : (65) 6284 8866 ASO Building Facsimile : (65) 6287 0311 Singapore 048544 Website : www.sbstransit.com.sg AUDITORS Company Registration Number: Deloitte & Touche LLP 199206653M Public Accountants and Chartered Accountants JOINT COMPANY SECRETARIES 6 Shenton Way, Angeline Joyce Lee Siang Pohr OUE Downtown 2 Chan Wan Tak, Wendy #33-00 Singapore 068809

Partner-in-Charge: Chua How Kiat

Date of Appointment: 27 April 2016

PG 53 SBS TRANSIT LTD BOARD OF DIRECTORS

LIM JIT POH CHAIRMAN (NON-INDEPENDENT NON-EXECUTIVE DIRECTOR) DATE OF APPOINTMENT AS DIRECTOR OF THE COMPANY: 1 JANUARY 2003

DATE OF LAST RE-ELECTION AS DIRECTOR OF THE COMPANY: 25 APRIL 2018

Mr Lim Jit Poh is the Chairman and a Non-Independent Non-Executive Director of SBS Transit Ltd. He is the Chairman of SBST Tender Committee and a member of both the Nominating Committee and the Remuneration Committee. Mr Lim is also the Chairman of ComfortDelGro Corporation Limited and VICOM Ltd. These are listed companies with business interests in land transport and inspection and testing services. The Company and VICOM Ltd are subsidiaries of ComfortDelGro Corporation Limited. Mr Lim is also the Chairman of several non-listed companies owned by the National Trades Union Congress (NTUC) and the CapitaLand Limited Group.

Mr Lim was a former top civil servant and a Fulbright Scholar. He was awarded the Public Administration Medal in 1972 and the Public Service Star (BBM) in 2015 by the President of the Republic of Singapore, as well as four awards by NTUC, namely the Friend of Labour Award in 1986, the Meritorious Service Award in 1990, the Distinguished Service Award in 2000 and the Distinguished Service (Star) Award in 2014. In 2006, he was also one of the recipients of the Distinguished Science Alumni Award from the National University of Singapore.

In his previous employment as Executive Director of two public-listed companies, Mr Lim had been directly involved in negotiations with business partners and relevant authorities on various joint venture projects in the ASEAN region, as well as in China, Hong Kong, the United Kingdom, Australia and Mauritius. He was also involved in the management of these operations. Mr Lim was a Council Member of the Singapore Chinese Chamber of Commerce and Industry and the National University of Singapore, and a Member of the Singapore British Business Council. He was also very active in community work being Chairman of a community centre management committee. Presently, he is a Trustee of the Singapore National Employers Federation and a Member of the Board of Management of Pei Chun Public School.

Mr Lim holds a Bachelor of Science (Hons) in Physics from the University of Singapore and a Master of Education from the University of Oregon, USA.

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YANG BAN SENG LIM SEH CHUN DEPUTY CHAIRMAN LEAD INDEPENDENT NON- (NON-INDEPENDENT NON- EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR) DATE OF APPOINTMENT AS DATE OF APPOINTMENT AS DIRECTOR OF THE COMPANY: DIRECTOR OF THE COMPANY: 1 OCTOBER 2012 1 MAY 2017 DATE OF LAST RE-ELECTION AS DATE OF LAST RE-ELECTION AS DIRECTOR OF THE COMPANY: DIRECTOR OF THE COMPANY: 25 APRIL 2019 21 MAY 2020 Professor Lim Seh Mr Yang Ban Seng is Chun is a Lead the Deputy Chairman Independent Non- of SBS Transit Ltd. He is a Non-Independent and Non- Executive Director of SBS Transit Ltd. Professor Lim Executive Director of the Company and the Deputy is the Chairman of the Nominating Committee and a Chairman of the SBST Tender Committee. member of the Audit and Risk Committee.

He is concurrently the Managing Director/ Professor Lim is the Associate Provost for Student Group Chief Executive Officer of ComfortDelGro Affairs at the Singapore University of Technology Corporation Limited, which is SBS Transit’s parent and Design. Prior to this, he spent more than 30 company, and Deputy Chairman of VICOM Ltd. years with the National University of Singapore during which he held a number of management Prior to this, he was the Chief Executive Officer of appointments including Special Assistant (Policy) to ComfortDelGro’s Taxi Business in Singapore where the Vice-Chancellor, Chief of Staff, Acting Director of he oversaw the operations of Comfort Transportation Institutional Resources, an Associate President, Head Pte Ltd and CityCab Pte Ltd. Before joining the Group of Department of Mechanical Engineering, Director in 1989, Mr Yang served as Assistant Director of the of NUS-CREATE and Deputy Dean of Faculty of Ministry of Education, Deputy Director of the Ministry Engineering. His main research effort is to understand of Home Affairs and the National Trades Union the friction and wear behaviour of engineering Congress’ Secretary for Cooperatives. At the NTUC’s materials. May Day Awards in 2013, he was awarded the Medal of Commendation. Professor Lim was a Public Service Commission (PSC) Overseas Merit Scholar. He holds a Bachelor of Arts Mr Yang holds a Bachelor of Science (Operations (Hons) in Engineering Science from Oxford University, Research and Statistics) (Hons) from the University of Master of Arts from Oxford University, Master of Manchester and a Master of Business Administration Engineering from National University of Singapore from the National University of Singapore. and Doctor of Philosophy from Cambridge University. He is a Fellow of the Institution of Engineers, Singapore, the Institution of Mechanical Engineers, UK and the Institute of Materials, Minerals and Mining, UK. He is a registered Professional Engineer in Singapore and a Chartered Engineer in the UK. He was awarded the Public Administration Medal (Silver) in 2005 and the Long Service Medal in 2006 by the President of the Republic of Singapore.

Professor Lim was a Director of the Singapore Symphonia Company Limited until October 2017. He is presently Chairman, Singapore School of Science and Technology Board of Directors.

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BOARD OF DIRECTORS

CHUA MUI HOONG JOHN DE PAYVA INDEPENDENT NON- INDEPENDENT NON- EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR DATE OF APPOINTMENT AS DATE OF APPOINTMENT AS DIRECTOR OF THE COMPANY: DIRECTOR OF THE COMPANY: 26 APRIL 2019 26 JULY 1999

DATE OF LAST RE-ELECTION AS DATE OF LAST RE-ELECTION AS DIRECTOR OF THE COMPANY: DIRECTOR OF THE COMPANY: 21 MAY 2020 25 APRIL 2019

Ms Chua Mui Hoong is Mr John De Payva is an Independent Non- an Independent Non- Executive Director of Executive Director of SBS Transit Ltd. She is a member of both the Audit and SBS Transit Ltd. Mr De Payva is a member of both the Risk Committee and the Service Quality Committee. Remuneration Committee and the Service Quality Committee. Ms Chua is a journalist and editor. She is the associate editor of The Straits Times, Singapore’s leading Mr De Payva is the President Emeritus of the National English language daily news publication and was the Trades Union Congress (NTUC). He is also the Opinion editor from 2011 to 2020. She is the author Executive Director and Secretary-General Emeritus of several books, including Singapore, Disrupted of the Singapore Manual and Mercantile Workers’ (2018). She writes regularly on social and political Union, a Director of Orchid Leisure Enterprises (Pte) affairs. Ltd and a Trustee of the NTUC, the National Transport Workers’ Union and the DBS Staff Union. She is a former board member of the Agri-Food and Veterinary Authority, where she was a member Mr De Payva holds a Diploma in Industrial Relations of the Audit and Risk Committee. She is also a from the Singapore Institute of Labour Studies. former director of Straits Times Press, a subsidiary of Singapore Press Holdings. Mr De Payva was awarded the Public Service Medal in 1998, the Public Service Star in 2004, the Meritorious Ms Chua holds a Bachelor of Arts (Honours) in English Service Medal in 2011 by the President of the Republic literature from Cambridge University and a Master of Singapore and the Distinguished Service (Star) in in Public Administration from the Harvard Kennedy 2012 by NTUC. School.

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SUSAN KONG YIM PUI LEE SOK KOON INDEPENDENT NON- (MRS CONSTANCE KOH) EXECUTIVE DIRECTOR INDEPENDENT NON- DATE OF APPOINTMENT AS EXECUTIVE DIRECTOR DIRECTOR OF THE COMPANY: DATE OF APPOINTMENT AS 1 OCTOBER 2017 DIRECTOR OF THE COMPANY: 1 MAY 2017 DATE OF LAST RE-ELECTION AS DIRECTOR OF THE COMPANY: DATE OF LAST RE-ELECTION AS 21 MAY 2020 DIRECTOR OF THE COMPANY: 21 MAY 2020 Ms Susan Kong Yim Pui is an Independent Mrs Constance Koh Non-Executive is an Independent Director of SBS Transit Ltd. She is the Chairman of Non-Executive Director of SBS Transit Ltd. She is the the Remuneration Committee and a member of both Chairman of the Audit and Risk Committee and a the Nominating Committee and the SBST Tender member of both the Service Quality Committee and Committee. the SBST Tender Committee.

Ms Kong has been a practising lawyer for more than She is also an Independent Non-Executive Director of 30 years and is recognised as a leading practitioner Japan Foods Holding Ltd, a public listed company on in the areas of Banking and Finance, Real Estate, the Singapore Exchange and an honorary member of Mergers and Acquisitions and Capital Markets by the School’s Fundraising Committee of Singapore Arts Chambers Global, IFLR 1000, AsiaLaw and Euromoney School Ltd, Singapore’s first pre-tertiary specialised Legal Group Guide. arts school. Mrs Koh is also an independent Director of NUS America Foundation, Inc., a tax exempt public Ms Kong has been a partner in several major charity in the United States of America. firms before founding Q.E.D. Law Corporation in December 2012. In her practice, she has advised listed Mrs Koh was the Director of Operations in the companies and financial institutions on corporate Development Office of the National University of governance and compliance issues. Singapore from May 2012 to August 2017. Prior to this appointment, Mrs Koh was the Finance Director of Ms Kong has had extensive international experience Lum Chang Holdings Ltd and L.C. Development Ltd both in her law practice and in her involvement (now known as AF Global Limited), public companies in Company Boards. Ms Kong has acted as lead which are listed on the Singapore Exchange Ltd. She counsel for many MNCs and large corporations was responsible for the finance and corporate affairs in their investments and their multi-jurisdictional of the two listed companies covering all financial joint ventures in Asean countries, China, India and matters, corporate governance, tax, legal, corporate Australia; and banks and financial institutions in many communications and internal audit for more than 20 cross-border financing transactions. On the corporate years. front, Ms Kong has been a director of Surbana Corporation Private Limited, which had extensive Mrs Koh holds a Bachelor of Accountancy (Hons) projects in many parts of China. She was also an from the then University of Singapore in 1975. She independent director of UOB Radanasin Bank Public is a Member of the Institute of Singapore Chartered Company Limited in Thailand for 9 years before it Accountants and a member of the Institute of merged and was reorganized as UOB Thailand. Directors in Singapore.

Ms Kong is Chairperson of Singapore Tyler Print Institute, an art institution that participates in many art fairs globally and has collaborations with artists and art institutions all over the world. Ms Kong is also a Director of HealthServe Limited.

Ms Kong holds a Bachelor of Laws (Hons) from the National University of Singapore.

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BOARD OF DIRECTORS

LIM SIANG HOE, BENNY TAN KIM SIEW INDEPENDENT NON- INDEPENDENT NON- EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR DATE OF APPOINTMENT AS DATE OF APPOINTMENT AS DIRECTOR OF THE COMPANY: DIRECTOR OF THE COMPANY: 26 APRIL 2018 1 JUNE 2019

DATE OF LAST RE-ELECTION AS DATE OF LAST RE-ELECTION AS DIRECTOR OF THE COMPANY: DIRECTOR OF THE COMPANY: 25 APRIL 2019 21 MAY 2020

Mr Lim Siang Dr Tan Kim Siew is an Hoe Benny is an Independent Non- Independent Non- Executive Director of Executive Director of SBS Transit Ltd. He is a member SBS Transit Ltd. He is a member of both the Audit and of both the Audit and Risk Committee and the Risk Committee and the Service Quality Committee Nominating Committee. of the Company. He is also an Independent Non- Executive Director of VICOM Ltd. Mr Lim is the Chairman of Temasek Foundation Connects CLG Limited as well as the Chairman of Dr Tan is presently a Senior Consultant in the Temasek Foundation CLG Limited. He is also an Ministry of Finance and Chairman of the Governing Independent Director of Tridex Pte Ltd. He is Special Board for the Mechanobiology Institute, National Advisor to the Centre for Liveable Cities (Ministry of University of Singapore. From 2012 to 2014, Dr Tan National Development) and the National Security served as Commissioner of Inland Revenue. Prior Studies Programme of the S. Rajaratnam School to this appointment, Dr Tan was the Permanent of International Studies (Nanyang Technological Secretary (Defence Development) of the Ministry University). He is also the Independent Non-Executive of Defence from 2003 to 2012. He had also held Chairman of the National Parks Board and a Member other appointments in the public service, including of the National Records Advisory Committee (National CEO of the Urban Redevelopment Authority, Deputy Library Board). Secretary in the Ministry of Finance and in the Ministry of National Development, Chairman of the Defence Mr Lim retired from public service on 1 May 2016. Science and Technology Agency, and Chairman of the Mr Lim was a Deputy Commissioner of Police and DSO National Laboratories. held appointments which included Director of the Internal Security Department, Permanent Secretary Dr Tan was awarded the Public Administration Medal of the Ministry of Home Affairs, Ministry of National (Silver) (Military) in 1990, the Public Administration Development, Prime Minister’s Office and National Medal (Silver) in 1996, the Public Administration Medal Security and Intelligence Coordination. (Gold) in 2001 and the Long Service Medal in 2003 by the President of the Republic of Singapore. Mr Lim was awarded the Public Administration Medal (Gold) in 2002 and the Meritorious Service Medal in Dr Tan holds a Bachelor of Arts (Honours) 2010 by the President of the Republic of Singapore. (Engineering Tripos) with Distinction in Electronics Engineering and Doctor of Philosophy (Engineering) Mr Lim holds a Bachelor of Arts (Hons) in English from from the University of Cambridge. the National University of Singapore and a Master of Science with Distinction in Political Sociology from the London School of Economics and Political Science.

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YU CHING MAN INDEPENDENT NON-EXECUTIVE DIRECTOR DATE OF APPOINTMENT AS DIRECTOR OF THE COMPANY: 26 APRIL 2018

DATE OF LAST RE-ELECTION AS DIRECTOR OF THE COMPANY: 25 APRIL 2019

Professor Yu Ching Man is an Independent Non-Executive Director of SBS Transit Ltd. He is the Chairman of Service Quality Committee and a member of both the Remuneration Committee and the SBST Tender Committee.

Professor Yu is a Professor at the Interdisciplinary Division in Aeronautical and Aviation Engineering at the Hong Kong Polytechnic University. He is also concurrently the Head of Training for both the Flight Training Organization (HKCAD-509A) for commercial airline pilots and licensed aircraft engineers (HKAR-147) at the university.

Prior to this, he was a Professor and Programme Director in Sustainable Infrastructure Engineering (Land Transport) and Sustainable Infrastructure Engineering (Building Services) at the Singapore Institute of Technology. He was formerly with the Nanyang Technological University where he held various positions including (1) Head, Division of Aerospace Engineering in the School of Mechanical and Aerospace Engineering, (2) Director, Master of Science Programme in Aerospace Engineering with the Technical University of Munich, Germany, (3) Vice-Dean, Office of Admissions, (4) Member of the University Council (now Board of Trustee), (5) Principal Staff Officer, President’s Office and (6) Director, Part-time Master of Science Programme in Biomedical Engineering with the Singapore General Hospital.

He was also an Adjunct Professor to the Department of Architecture and Building Sciences at the Xi’an JiaoTong University, China, a Visiting Scientist to the Department of Mechanical Engineering at the University of Tokyo, Japan and the Institute of Fluid Mechanics at the University of Erlangen, Germany. He is currently trainer for holistic gas turbine in Rolls Royce Singapore.

Professor Yu’s research interest is on non-intrusive measurement techniques for fluid flow such as, Laser-Doppler Anemometry, Phase- Doppler Anemometry, Particle Image Velocimetry and Planar Laser Induced Fluorescence, and their applications to aerodynamics, propulsion, turbulent mixing flows, biofluid mechanics, environmental fluid mechanics and fundamental plume and jet studies.

Professor Yu was awarded the Long Service Medal in 2017 by the President of the Republic of Singapore.

Professor Yu holds a Bachelor of Engineering (Hons), Associateship of the City and Guilds of London Institute, Doctor of Philosophy and Diploma of Imperial College from Imperial College of Science, Technology and Medicine UK. His PhD studies were supported previously by the Royal Aircraft Establishment (UK). He is a Chartered Engineer (UK), Fellow of the Institution of Mechanical Engineers (UK), Fellow of the Royal Aeronautical Society (UK) and Chartered Engineer in Transportation and Fellow of the Institution of Engineers, Singapore.

PG 59 SBS TRANSIT LTD KEY MANAGEMENT

CHENG SIAK KIAN TAN ENG KOK, IVAN CHIEF EXECUTIVE SENIOR VICE PRESIDENT OFFICER HEAD OF BUS

Mr Cheng Siak Mr Tan Eng Kok, Ivan is Head of Bus Kian is the Chief Business in SBS Transit. He joined Executive Officer SBS Transit in 1996 as Vice President of SBS Transit. (Corporate Development) and later He first joined assumed the position of Vice President the Company in September 2015, and (Operations). He was subsequently appointed Vice President served as Senior Vice President in the in charge of bus operations for West District in 1998. He was bus operations division where he was an promoted to Senior Vice President on 1 January 2012. integral member of the tender team that was successful in its bid for the Seletar Prior to joining the Company, Mr Tan had worked as an Engineer Bus Package. In December 2016, he was with Hewlett Packard. He also has corporate planning and posted to Australia to helm the New market research experience from his stint with the former South Wales operations of our parent Singapore Institute of Standards and Research (SISIR). company, ComfortDelGro. There, he extended the range of services to include Mr Tan holds a Bachelor of Engineering (Honours) in Mechanical non-emergency patient transportation Engineering and a Master of Business Administration from the and expanded the Company’s footprint National University of Singapore. into other states. He returned to SBS Transit in July 2019 to assume the appointment of Chief Operating Officer and was promoted to Acting Chief YEO SEE PENG Executive Officer on 1 March 2020. A SENIOR VICE PRESIDENT year later, he was appointed the Chief HEAD BUS OPERATIONS Executive Officer of the Company. Mr Yeo See Peng is Head of Bus Prior to joining the Company, Mr Operations in SBS Transit - an Cheng served in a number of senior appointment he assumed since 1 appointments in the Ministry of Defence November 2020. and the Republic of Singapore Air Force. Mr Yeo joined the ComfortDelGro Group in December He obtained a Bachelor of Electrical and 2013, serving as Senior Vice President, Fleet Services of Electronic Engineering (First Class) from ComfortDelGro’s Taxi Business in Singapore. From January the University of Manchester, United 2015 to November 2017, he was the Chief Executive Officer of Kingdom and a Master of Business Swan Taxis, a subsidiary of ComfortDelGro in Perth. He returned Administration from the Massachusetts to Singapore and assumed the appointment of Head of Bus Institute of Technology, USA. Support in SBS Transit. Prior to joining ComfortDelGro, Mr Yeo served in both the Ministry of Defence and the Singapore Armed Forces (SAF) for about 30 years, where he held several senior command and staff appointments.

Mr Yeo, an SAF Merit Scholar, holds a Bachelor and a Master of Arts from the University of Oxford, United Kingdom, as well as a Master of Public Administration from the Harvard University, USA. He currently serves as a member of the Advisory Committee of Dunman High School.

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PANG FUI ENG, IVAN LEONG YIM SING SENIOR VICE SENIOR VICE PRESIDENT PRESIDENT HEAD OF RAIL HEAD BUS ENGINEERING Mr Leong Yim Sing joined SBS Transit in 2003 and is currently the Head Mr Pang Fui of Rail Business with responsibilities Eng, Ivan is for the operations of the North East Head of the Bus Line, the Sengkang Punggol LRT and Engineering Division in SBS Transit. He the Downtown Line. Mr Leong has more than 30 years of joined SBS Transit as Deputy General experience in the operations and maintenance of Singapore’s Manager of Fleet Management in rail systems. He was actively involved in the startup of January 2007. He was promoted to Singapore’s first MRT system in 1985, as a Rolling Stock engineer General Manager in August 2008, where and has been with the railway industry since then. he was in charge of the maintenance management / operation of the Bus Mr Leong graduated with First Class Honours in Mechanical Business. With the restructuring of the Engineering from the Imperial College, London. He is a Bus Business on 1 September 2016, registered Professional Engineer in Singapore, and an Associate he now heads the Bus Engineering of the City & Guilds Institute, London. He is also a Fellow of the Division. He oversees the new Bus Institution of Engineers (Singapore) and a Chartered Engineer Engineering Systems and Technology (Railway Engineering). He is a member of the Industry Advisory department, the Maintenance Planning Committee (IAC) for the Sustainable Infrastructure Engineering and Bus Asset department, Workshops Programme of the Singapore Institute of Technology (SIT). and Bus Engineering sections. The Bus Engineering Division is responsible for the bus fleet performance, maintenance, GOEI BENG GUAN, ALEX spares inventories, warehouses and CHIEF EXECUTIVE OFFICER on-board bus equipment to achieve DOWNTOWN LINE the Negotiated Contracts and tender Mr Goei Beng Guan, Alex is Chief packages performance requirements and Executive Officer of SBS Transit DTL financial targets. It is also responsible for Pte Ltd, which operates and maintains the modernisation of bus engineering the Downtown Line. He first joined the and maintenance capabilities. Company in 1985, starting with bus service planning and project management. From September Prior to joining SBS Transit, Mr Pang was 1998, Mr Goei was extensively involved in the bid and launch of with the Republic of Singapore Armed the Sengkang Punggol LRT and North East Line, of which the Forces for 25 years holding various latter is Singapore’s first underground, driverless rail system. staff and command appointments in Heading traffic, passenger service and operations, he played an the Army Logistics Department. His last integral role in ensuring the successful opening of the NEL in appointment was a Senior Project Officer 2003. He was subsequently promoted to Senior Vice President, with the Joint Logistics Department, SAF. Rail Operations in January 2013. He holds a Bachelor of Engineering (1st Mr Goei graduated from the National University of Singapore Class) in Mechanical Engineering from with a Bachelor of Arts in Economics and History. He also the University of Birmingham, UK and a obtained postgraduate diplomas in Road Passenger Transport Master of Science (Gun Systems Design) and Training and Development Management from the Chartered from Cranfield University, UK. Institute of Logistics & Transport and UK Institute of Training and Development respectively. He is also an Associate of the Institution of Railway Signal Engineers.

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SIM VEE MING, JEFFREY SENIOR VICE PRESIDENT ACTING HEAD (NORTH EAST LINE AND SENGKANG PUNGGOL LRT) & HEAD RAIL DEVELOPMENT

Mr Sim Vee Ming, Jeffrey is currently the Acting Head of the North East Line (NEL) and the Sengkang Punggol Light Rail Transit (SPLRT) systems. He is concurrently the Head of Rail Development where he oversees the business expansion and develops operational and engineering capabilities across the Company’s rail division. Mr Sim had previously been the Head of Engineering for the NEL and SPLRT.

Before joining SBS Transit in 2015, Mr Sim was a Group Commander in the Republic of Singapore Air Force where he spent 15 years holding various command and staff positions in engineering, maintenance, logistics and planning. He holds a Bachelor of Engineering (Honours) and a Master of Engineering from the National University of Singapore (NUS). He also graduated with a Master of Arts (with distinction) from the Massey University, New Zealand. He has also attended executive management programmes conducted by the Lee Kuan Yew School of Public Policy and the NUS Business School.

FOO JANG KAE LEE YAM LIM SENIOR VICE PRESIDENT VICE PRESIDENT (SPECIAL HEAD RAIL ENGINEERING (NORTH EAST LINE GRADE) AND SENGKANG PUNGGOL LRT) HEAD RAIL ENGINEERING (DOWNTOWN LINE) Er. Foo Jang Kae is the Head of Engineering for the North East Line Mr Lee Yam Lim and the Sengkang Punggol LRT. He is the Head of has held this position since 2015 Engineering for before he was assigned to head the Downtown Line’s the Downtown Line. He has been with Engineering department for two years between 2017 and the Company for more than 20 years and 2019. He resumed this current appointment in October was appointed to this position in October 2019. An experienced railway engineer, he has been with the 2019. He was extensively involved in the Company for 20 years, working primarily in the Power and start-up and maintenance of the North East Rolling Stock departments. Line, which was reputed as the world’s first automated heavy metro system. He was Before joining SBS Transit, he had spent eight years in the also extensively involved in the bid for the electrical power industry. Downtown Line and upon the award of the contract, headed its Signalling Department. Er. Foo obtained First Class Honours in Electrical and Electronic Engineering from Strathclyde University (UK) Mr Lee obtained a Bachelor of Computer and was a British High Commission Raffles Scholar where Technology from the Nanyang he graduated with a Master of Science in Electrical Power Technological University. He is a member of Engineering from the University of Manchester, Institute of the Institution of Engineers, Singapore and Science and Technology (UK). He is a registered Professional a registered Chartered Engineer in Railway Engineer and a Licensed Electrical Engineer in Singapore. Engineering accredited by the Institution of He is also a Chartered Engineer with both the Engineering Engineers, Singapore. Council UK and the Institution of Engineers, Singapore. He is a Member of the Institution of Engineering and Technology (UK) and a Fellow of the Institution of Engineers Singapore. He also serves on the Industry Advisory Committee (IAC) for the Singapore Institute of Technology’s Electrical Power Engineering Programme.

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MOK PENG FAI, ANTHONY TAN I-LIN, TAMMY VICE PRESIDENT (SPECIAL GRADE) SENIOR VICE PRESIDENT HEAD RAIL OPERATIONS (NORTH CORPORATE COMMUNICATIONS EAST LINE AND SENGKANG PUNGGOL LRT) Ms Tan I-Lin, Tammy is Senior Vice President, Mr Mok Peng Fai, Anthony Corporate Communications is the Head of Operations of SBS Transit. She is also for the North East Line (NEL) the Group Chief Corporate and the Sengkang Punggol LRT (SPLRT) systems. Communications Officer and Spokesperson He honed his close to 20 years of experience in for ComfortDelGro Corporation Limited, SBS railway operations starting out as a Chief Controller Transit’s parent company. She is responsible for all in the NEL’s Operations Control Centre (OCC). In corporate communications functions, including this capacity, he was heavily involved in the start-up promoting the Group’s image, overseeing its various of the NEL, which was the world’s first automated publications,coordinating requests for sponsorships underground heavy metro system then. Over the and donations, and liaising with the media years, he assumed responsibilities for the daily community. operations of the SPLRT as well as the NEL’s OCC. Ms Tan started her career with Singapore Press In October 2017, he was appointed Head of Holdings in 1995 and held several positions in The Operations for the NEL and SPLRT. Mr Mok holds Straits Times, including Deputy Money Editor and diplomas in Mechanical Engineering from the Deputy News Editor. Singapore Polytechnic and in Management Studies from the Singapore Institute of Management. Ms Tan holds a Bachelor of Social Sciences (Hons) from the National University of Singapore.

CHEW KUM EE CHIEF FINANCIAL OFFICER LEOW CHEE YEN, DON VICE PRESIDENT (SPECIAL GRADE) Ms Chew Kum Ee joined SBS HUMAN RESOURCE Transit on 18 December 2017 and was appointed as Chief Mr Leow Chee Yen, Don was Financial Officer on 11 May appointed Vice President 2018. Ms Chew is responsible of Human Resource in SBS for the accounting, Transit in June 2014. He financial and statutory reporting, financial controls, is responsible for human budgeting, and taxation matters. resource management to ensure that the company continues to recruit, engage and retain its fair share Prior to this, Ms Chew was the Finance Director of of manpower and talent. Before this, he was the Group Enterprise at Singapore Telecommunications Deputy Director of Human Resource in the Ministry Limited. She has over 20 years of financial of Trade and Industry, where he was responsible for management and accounting experience, including business partnering, compensation and benefits, eight years in audit with PricewaterhouseCoopers. recruitment, as well as employee engagement and welfare. He had also served in the Ministry of She graduated with a Bachelor of Accountancy Defence where he worked in the Defence Policy (Second Upper Honours) from Nanyang Office and Manpower Policy Department. Mr Leow Technological University and is a Chartered has a Bachelor of Arts and Social Sciences Honours Accountant with the Institute of Singapore Chartered (2nd Class Upper) from the National University of Accountants. Singapore.

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CHONG YEW FUI, ANGELINE JOYCE LEE ADRIAN GROUP GENERAL COUNSEL & JOINT COMPANY COMFORTDELGRO SECRETARY GROUP GROUP CHIEF Ms Angeline Joyce Lee joined the Group INTERNAL AUDIT on 7 September 2020 as Group General OFFICER Counsel and Joint Company Secretary to oversee the Group’s legal and corporate Mr Chong Yew secretariat matters, as well as compliance Fui, Adrian is Group Chief Internal Audit and corporate governance to facilitate business processes and Officer of ComfortDelGro Corporation organisational efficiency. In 1993, Ms Lee joined Singapore Press Limited. He is responsible for the Holdings (SPH) to set up the Legal Department and has held internal audit functions of the Group, different positions such as Head of Legal and Corporate Affairs including SBS Transit’s. Prior to joining in SPH Magazines, Head of Risk Management and Compliance the Group in 2017, he was Senior Vice and Vice President of SPH Legal-Secretariat Division. Ms President of Hyflux Ltd. Mr Chong has Lee holds a Master in Business Law from the University of spent many years in the audit profession Westminster in United Kingdom and is a Chartered Secretary with extensive commercial, operations and Certified Risk-based Auditor. and overseas experience, particularly in corporate governance, systems risks and process controls. CHAN WAN TAK, WENDY JOINT COMPANY SECRETARY Mr Chong holds a Bachelor of Commerce (Accounting and Finance) Ms Chan Wan Tak, Wendy is the Joint from Murdoch University. He is a Company Secretary of SBS Transit. She member of CPA Australia and is a also holds a similar appointment in Certified Information Systems Auditor. ComfortDelGro Corporation Limited Mr Chong is also an ISACA Member. which is SBS Transit’s parent company. She joined ComfortDelGro in September 2007 as Vice President of Group Finance. She is currently Senior JACKSON CHIA Vice President of Group Finance of ComfortDelGro. COMFORTDELGRO GROUP Prior to this, Ms Chan was Vice President of Finance and GROUP CHIEF RISK Operations at k1 Ventures Limited. She had also been with & SUSTAINABILITY Deloitte & Touche LLP as Senior Audit Manager. OFFICER Ms Chan holds a Bachelor of Accounting & Finance (Hons) Mr Jackson Chia from the University of Glamorgan, United Kingdom. She is was appointed a non-practising Member of the Institute of Certified Public the Group Chief Sustainability Officer on Accountants of Singapore and a Fellow of the Chartered 5 November 2018. He is concurrently Association of Certified Accountants. Senior Vice President of Group Transformation Office. Mr Chia joined the Group in 2017 after a 28-year career with the Singapore Armed Forces, where he held various senior appointments in the Republic of Singapore Navy. He holds a Bachelor of Social Science (First Class) degree in Economics and Statistics from the University of Birmingham, and a Master of Arts from the Fletcher School of Law and Diplomacy. Mr Chia also attended the International Executive Programme at INSEAD, France in 2008.

PG 64 ANNUAL REPORT 2020 OPERATIONS REVIEW

PUBLIC TRANSPORT SERVICES BASIC BUS SERVICES • CHINATOWN DIRECT BUS SERVICES • EXPRESS BUS SERVICES • NITE OWL BUS SERVICES • CITY DIRECT BUS SERVICES • NORTH EAST LINE • DOWNTOWN LINE • SENGKANG LIGHT RAIL TRANSIT SYSTEM • PUNGGOL LIGHT RAIL TRANSIT SYSTEM

1,195.8 REVENUE ($’MILLION) 10,597 TOTAL NUMBER OF EMPLOYEES BUS SERVICES

In 2020, we continued to be the major public bus operator with a market share 3,531 of 61%. We managed 226 bus routes and TOTAL BUS FLEET operated about 31,000 bus trips on an average weekday. All our bus routes are wheelchair-accessible.

For the year under review, we worked 226 with the Land Transport Authority (LTA) to TOTAL BUS ROUTES roll out three additional bus services and OPERATED amend another three existing routes to better serve commuters’ needs.

We also took over the operation of four City Direct bus services from private 78 operators. Meanwhile, two bus routes – TOTAL STATIONS Services 128 and 147e – were withdrawn IN OPERATION from service due to extremely low demand.

Six of our bus services also shifted operations to the new interim Jurong East 192 Interchange. TOTAL TRAIN FLEET

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GREENER BUSES Towards a greener environment, the LTA handed over 45 new and more environmentally friendly buses to replace the older buses in our fleet. Among the public bus operators, we operated half of the fleet of 90 green public buses on the road. The new additions comprised 25 hybrid buses and 20 fully electric ones. This brought the total number of buses in our holding fleet to 3,531. All were wheelchair-accessible with close to 57% being single deck buses, 43% double decks and 10 articulated ones. Our buses were garaged in seven bus depots and a bus park. In all, we operated from 17 bus interchanges and 14 bus terminals.

AUTONOMOUS BUSES Our involvement in the trial of driverless buses on Jurong Island with ST Engineering continued in 2020. Our BCs serve as safety operators on board; vigilant and ready to take over the control of the bus in an emergency.

As an initiative under the national Emerging Stronger Taskforce, which has been set up to reignite the economy, these autonomous vehicles (AVs) are now operating on revenue service. This pilot service commenced in January 2021 on Jurong Island and will run until April 2021.

We also joined two consortiums in the AV Call for Collaboration by the LTA and the Economic Development Board.

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BUS SAFETY on our critical IT systems to validate our In bus safety, there were zero fatal procedures as well as familiarise our staff accidents in 2020 compared to one in with recovery processes. 2019. As at December 2020, our accident rate was 0.09 cases or 220 accidents per RE-ORGANISATION FOR AGILITY AND GROWTH 100,000 bus-km. This was a significant In November 2020, we re-organised improvement compared to 0.12 cases or our bus division to better support our 310 accidents in 2019. operational needs by setting up a new Bus Development division. The new division Besides instituting safety protocols, focusses on Government liaison, bus policies and procedures, we continued to tenders, bus schedules as well as data invest in training and technology to help analytics to keep pace with technological our Bus Captains (BCs) to be safer drivers. developments and systems. More importantly, it also works to expedite In 2020, we rolled out the iSafe the induction of new processes and system fleet-wide to track the driving technology and drive innovations in our behaviour of our BCs to provide safe and bus operations. comfortable rides for our commuters. Using technology as an independent assessor, this system collates data from RAIL SERVICES two of our landmark systems – SAGE, a telematics system that monitors the In rail services, we continued to operate smoothness and comfort of bus rides and 83 km of rail networks in Singapore – the Mobileye, an advanced driver assistance North East Line (NEL), Downtown Line system that alerts BCs to potential (DTL) and Sengkang-Punggol Light Rail collisions – to present an assessment of Transit (SPLRT) systems. We operate 78 the individual BC’s driving competency. stations with a fleet of 192 trains and have With it, supervisors are able to undertake a current market share of 30.6%. All the the necessary coaching of BCs for stations on our rail networks are open for improvements. passenger service except one – Teck Lee on the Punggol LRT system – which will The Vehicle-Activated Speed Display open in tandem with developments in the (VASD) system, which reminds BCs to area. keep to the speed limit within the bus depots, interchanges and terminals, At the peak of the COVID-19 crisis, we continued to be implemented at another suffered an 86% drop in passenger load. In three more premises. To-date, the system is in place at 23 bus premises and more will continue to be installed.

We also produced an educational video which was complemented by a series of posters to reinforce safe habits and behaviour as we worked towards a zero rate of accidents due to slips, trips and falls at the workplace.

Our good safety records were recognised by the LTA. Our Tampines Bus Package received the merit award in the “Safe Bus Operator of the Year” category.

CONTINGENCY PLANNING We conducted four disruption exercises at the Bedok, Toa Payoh, Compassvale and Clementi Interchanges to ensure that our drawer plans remained relevant in times of emergency. In addition, we also conducted disaster recovery exercises

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December 2020, ridership was just 72.7% over their 2019 performances. The SPLRT of what was registered a year earlier. achieved 426,000 train-km compared to the nationwide LRT’s network average RAIL RELIABILITY of 227,000 train-km. It also improved on In train service reliability, there was its reliability by about 70% over that of its one major disruption that exceeded 30 performance in 2019. minutes on each of our MRT Line and four on our LRT systems in 2020. Despite In 2020, the NEL and DTL also achieved this, the Mean Kilometre Between Failure all the rail Operating Performance (MKBF) of our two MRT lines exceeded Standards stipulated by the regulator, the 2 million train-km mark for the first the LTA. time. The DTL achieved an MKBF of 2.09 million train-km while the NEL clocked STRATEGIC PARTNERSHIPS 2.04 million train-km, both of which Driven towards achieving rail excellence, outperformed the nationwide MRT we continued to learn and adopt best network’s average of 1.45 million train-km. practices from experienced railway In fact, the DTL improved on its reliability operators around the world. by about 83% and the NEL by some 48%

In 2020, we signed a Teaming Agreement with the RATP Développement S.A., a French Government-owned company and the largest rail operator in Paris, to explore new business opportunities and deliver world-class metro services in Singapore. The signing was witnessed by the France Minister Delegate for Foreign Trade and Economic Attractiveness, H.E. Mr Franck Riester.

PG 68 ANNUAL REPORT 2020

We also signed a Memorandum of assistance among other features. This Understanding with Thales, a French solution is expected to be tested on the multinational company that designs NEL Woodleigh Station in the first half of and builds electrical systems and 2021. provides services for various industries including transportation, to employ RAIL SAFETY new digital technologies to deliver a In rail safety, our safety performance safer and more comfortable passenger improved as we focussed efforts on journey for our MRT commuters. We are inculcating increased awareness for an currently working on a solution to detect accident-free workplace. Injury case crowdedness at stations and in trains to amongst rail staff and contractors fell by provide heightened situational awareness 85.7% from 14 cases to two in 2020. for our staff to ease congestion more efficiently, and enhance comfort and the Our good safety records were recognised travel experience for commuters. It is also by the LTA. Our DTL was honoured with being developed to detect suspicious the “Safe Rail Line of the Year (Excellence)” persons or unattended baggage and award in 2020 – garnering the top spot even identify those who need mobility twice in the award’s three-year history.

We also worked on safety campaigns to contribute to pleasant journeys for our elderly commuters. At the NEL Chinatown Station, besides the display of posters to remind them to hold on firmly to the handrails on the escalators, we also piloted public announcement safety messages in two Chinese dialects – Hokkien and Cantonese – besides English and Mandarin. In 2020, there were zero injuries arising from the improper use of the escalator that was involved in the pilot. We will continue to look at other creative ways to encourage and remind our elderly commuters to make travel safe and pleasant for them.

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MAINTENANCE FOR SERVICE RELIABILITY systems as well as replacement of train We continued to look at solutions to interior fittings. Due to COVID-19, the strengthen our condition monitoring project is expected to be delayed to 2025. capabilities for critical systems which will help boost our service reliability by pre- For the SPLRT, maintenance works empting faults. Concurrently, we carried continued to be conducted during out preventive maintenance works on passenger service hours on selected deteriorating component parts before Sundays from July to September 2020. they can develop into faults. This was necessary as some of the works included concrete hacking and On the NEL, we undertook and completed curing - both of which required extended a fleet-wide replacement of the signalling engineering hours. On these maintenance cable and terminals for the Platform Sundays, one platform of the loop Screen Door system. This was done pre- commenced service later while the other emptively as we had encountered multiple continued to be in regular operation failures of the system earlier. If left to serve all stations on the system. This unchecked, the failures could potentially was similar to the arrangements made cause a delay to train service. in 2019 when maintenance works were carried out during train service hours. The design of the in-running insulator In December 2020, maintenance works used on the NEL’s Overhead Catenary were intensified and the loop closure System was also reviewed and has extended to Saturdays as well. been approved for implementation by the LTA. The original two-piece design Besides maintenance works, we also has become a single piece to prevent implemented monitoring systems for critical the insulator from splitting apart and systems to improve our rail reliability. affecting power supply to the trains. It is progressively being implemented CONTINGENCY PLANNING system-wide and slated for completion by We were not able to conduct ground 3Q2021. deployment exercises due to COVID-19 restrictions. However, we conducted We also implemented the Safety Interlock these exercises virtually so as to continue Relay Bypass Switch to enable our staff to review and validate our emergency to quickly assume operation of the response preparedness plans in managing trains in the event of safety interlock rail service disruptions. “Exercise relay failures. With this, the trains can Endeavour” was held in September 2020, be moved and withdrawn from service “Exercise Harmony” was held in October without any prolonged delay to minimise and “Exercise Pinnacle” in November. inconvenience for our commuters. Works are expected to be completed by 2Q2021. We also organised exercises and invited external agencies to observe and validate Meanwhile, mid-life refurbishment of our plans and processes. “Exercise the 25 first-generation NEL trains, which Unicorn” was conducted at both the commenced in 2019, continued under NEL and SPLRT depots while “Exercise the multi-year programme. The works Phoenix” was held at DTL depot to include the installation of a new condition validate our response and management monitoring system which will provide plans in dealing with security threats. early warning of impending faults so that The LTA and the Police Public Transport preventive action can be undertaken. It Security Command attended as observers will also include an upgrade of the air- in the table-top exercises. To pre- conditioning and passenger information empt floods, “Exercise Highwaters” was

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organised on both our MRT lines. A system sub-sectors. Our bus scored 75.4 table-top exercise was conducted for the compared to the industry’s 74.4 while NEL while a physical one was held at the our rail achieved 75.3 compared to the DTL Geylang Bahru Station to validate the industry’s 73.4. process of setting up flood barriers at the station’s entrances. Officers from the LTA Our steady efforts to boost our rail and the Singapore Civil Defence Force reliability was also evidenced in the attended as observers in both exercises. PTC’s annual commuter satisfaction survey that was conducted from October FARE REVISION to November 2020. Similarly, our Rail In September 2020, the Public Transport outperformed the industry with a 98.8% Council (PTC) announced that there rating compared to the 97.9% and a mean would be no change to the public transport score of 8.1 compared to the 7.9. fares for the 2020 Fare Review Exercise in light of COVID-19 and its impact on In the Bus segment, we achieved a the economy. The full fare adjustment satisfaction rating of 96.9% compared to quantum of 4.4% will be rolled over to the the industry’s 97.3% and a mean score next Fare Review Exercise in 2021. of 7.7 compared to the industry’s 7.8. Overall, SBS Transit’s and the industry’s REORGANISATION FOR EFFICIENCY public transport mean satisfaction score The rail division restructured and remained at 7.8 out of 10, which was centralised some common key functions similar to 2019. for efficiency and optimum deployment of employees. As a result, some of the departments such as the Automatic Fare Collection and Fare Revenue Unit became a single unit.

COMMUTER SATISFACTION The drop in public transport ridership resulted in a sharp drop in the volume of feedback received. A total of 40,595 compliments and commendations were received in 2020, which was a 31.2% drop compared to 2019. The number of valid complaints received also declined by 15.0% to 3,752 as compared to 2019. In terms of complaints, about half of them were about the behaviour of our BCs. Management has formed a task force to address this aspect, which will include identifying and retraining BCs as needed.

Our efforts in serving our commuters bore fruit as evidenced in the annual Customer Satisfaction Index of Singapore that was administered by the Singapore Management University’s Institute of Service Excellence. Conducted from May to July 2020, SBS Transit topped the list in both the Public Bus and MRT

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OTHER COMMERCIAL SERVICES

BUS ADVERTISING • IN-TRAIN ADVERTISING • BUS HUB ADVERTISING • TRAIN STATION ADVERTISING • SHOP SPACE • ROAD SHOW SPACE

35.1 REVENUE ($’MILLION)

73 ADVERTISING TOTAL NUMBER OF EMPLOYEES Not surprisingly, advertising demand fell in 2020 as advertisers put their campaigns on hold due to the global pandemic.

Despite the general economic slowdown, Moove Media, our sister company, scored its largest advertising campaign in five years. Whealthfields Lohmann, the local distributor of Germany’s Walch disinfection products, strategically advertised its automatic foaming hand soap dispenser and a laundry sanitiser on 100 double deck buses to secure greater visibility and mindshare among consumers. Plying the heartlands in a targeted programme, the campaign buses ran for 20 weeks until 17 December 2020.

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Moove Media also netted another feather in its cap with its win at the A’Design Award and Competition for its 2019 campaign for the Taiwan Tourism Bureau. This is the largest international design competition with a panel comprising more than 200 jury members. Moove Media impressed the jury with its three- dimensional (3-D) design of a traditional Taiwanese house of red bricks and retro floral patterns tiles that is common in the townships to promote the cultural heritage and beauty of Taiwan. It exuded the charm of small Taiwanese towns and captured the imagination of commuters and motorists alike to garner the Silver award in the 2019-2020 Advertising, Marketing and Communication Design Category.

For 2020, Moove Media showcased To assist our tenants during this difficult its creativity through an interactive time, we extended rental reliefs. We also recruitment campaign for the Singapore organised promotional activities to help Maritime Foundation. A section of the boost demand. Traditional tiffin carriers North East Line’s Dhoby Ghaut Station and festive pens were produced and given was transformed into a trick-eye museum away as premiums, subject to a minimum where members of the public were able spend at participating tenant outlets. to interact with the installations and take photos with the artwork displays where As an active proponent of green initiatives, they could become a Ship Captain, Marine we collaborated with the Singapore Engineer or Data Analyst among other Environment Council to host our first occupations in the maritime industry. ever webinar on eco-labels and green They could also discover more about the purchasing practices. Our goal was to job opportunities. create awareness among our tenants about environmentally friendly practices RENTAL OF COMMERCIAL SPACES and the use of sustainable materials which could also serve to help reduce their daily In 2020, we leased 93.2% of our operational costs. commercial spaces at our bus interchanges and MRT stations. Our tenants were mainly food and beverage operators, retail and convenience stores as well as those offering medical, educational and beauty/wellness services.

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In spite of the pandemic, we continued to put in resources to promote sustainability across all aspects of our business. From environment to safety and security, staff recruitment to development, commuter engagement to reaching out to the communities we serve, we are and remain committed to ensuring a more sustainable future.

Zero pollutants greener buses 25 HYBRID BUSES 20 FULLY ELECTRIC BUSES

ENVIRONMENT

ENVIRONMENTALLY-FRIENDLY BUSES ULU PANDAN BUS DEPOT was the As the major public bus operator in Singapore, we work closely with the first bus depot to adoptSOLAR Land Transport Authority (LTA) in the use PANELS to generate electricity of greener buses on our roads. In 2020, and piped-in NEWater for bus we took delivery of 45 new and more washing environmentally friendly buses from the LTA to replace the older ones in our fleet. The new additions comprised 25 hybrid buses and 20 fully electric ones, which GREEN PRACTICES are on trial. These electric buses emit zero Our Ulu Pandan Bus Depot, which pollutants and provide commuters with a opened in 2018, was the first bus depot more comfortable ride as they are quieter to adopt green features such as solar than regular diesel buses. panels to generate electricity and piped- in NEWater for bus washing. We have With fleet replacement and renewal, expanded the use of solar panels with a the number of environmentally friendly 0.15MVp photovoltaic system to the newly buses has been on a steady increase. In expanded Yio Chu Kang Bus Interchange. 2020, it inched up by 1% compared to the This is expected to generate some previous year. 80% of our buses are now 183,000 KWH of energy annually which at least Euro 5 compliant. would be utilised for the interchange’s daily operations with the excess being fed back into the power grid system.

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ELECTRICITY CONSUMPTION REDUCED BY 15% IN 2020 WATER CONSUMPTION FELL BY 16%

Our NEL and DTL implemented energy For our tenants in our bus interchanges saving measures to conserve energy and MRT stations, we collaborated with usage in their daily operations. These the Singapore Environment Council (SEC) included optimising the use of electricity to host our first ever webinar on across our 78 stations in various areas eco-labels and green purchasing such as the tunnel ventilation, lightings practices. Our goal was to create and air-conditioning systems. Our trains awareness about environmentally friendly are placed on energy saving mode practices and the use of sustainable when they are on standby mode during materials which could also serve to help passenger service hours. Across our bus reduce their daily operational costs. operations, we make conscious efforts to reduce the use of our resources. In 2020, this resulted in 15% less electricity consumed and 16% less water used while our carbon dioxide emissions decreased by 9% when compared to 2019.

Recognition for Being Green In recognition of our green efforts, our Ulu Pandan Depot was conferred the Green Mark Platinum (Super Low Energy Building) Award GONE PAPERLESS by the Building and Construction by proactively changing the way Authority in February 2020. we operate Besides this, the SEC presented us with the Elite Award, which is the highest tier, in the Eco-Office Plus Certification. Our corporate We have also gone paperless by office and all our depots – eight proactively changing the way we operate bus depots and three rail depots in digitalising our bus and rail operations – each received the award for and maintenance. Besides being green, implementing environmentally this has enabled us to improve existing friendly practices in the workplace. systems/processes and increased We were also one of 12 companies productivity. It has also transformed in Singapore in 2020 to be the way we measure and improve accredited with the inaugural performance, and monitor and manage GreenDNA Award, which uses information. More information about an internationally recognised our digitalisation efforts can be found system under the United Nations’ in the Bits and Bytes chapter of this Environment Programme (UNEP) Annual Report. to fight the global climate crisis.

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SOCIAL in 2019. There were no fatal accidents involving our buses in 2020 compared COVID-19 to one in 2019. As a public transport operator offering an essential service, we were one of As safety is of paramount importance, the few companies that continued to we continued to invest in training and operate despite the lockdown during the technology to help our Bus Captains (BCs) COVID-19 pandemic. We made changes to be safe drivers besides instituting safety to the way we delivered our services to be protocols, policies and procedures. sustainable in a new setting. This included the cleaning and disinfection of all our In 2020, we rolled out the iSafe system premises, safe distancing measures, fleet-wide to track the driving behaviour digitalisation of our processes and care of our BCs in providing safe and for our people. Details of the impact it comfortable rides for our commuters. had on our operations and our response Using technology as an independent and management can be found in several assessor, this system collates data from chapters of this Annual Report. two of our landmark systems – SAGE is a telematics system that monitors the smoothness and comfort of bus rides and Mobileye is an advanced driver assistance system that alerts driver to potential collisions – to present an assessment of the BCs’ driving competency. With it, supervisors are able to undertake the necessary coaching of BCs for improvements.

The Vehicle-Activated Speed Display (VASD) system, which reminds BCs to keep to the speed limit within the bus depots, interchanges and terminals, continued to be implemented at another three more premises. To-date, the system SAFETY is in place at 23 bus premises and more In rail safety, our safety performance will continue to be installed. improved as we focussed efforts on inculcating increased awareness for an To encourage a stronger safety culture accident-free workplace. Injury cases at depots and interchanges, we appointed amongst rail staff and contractors fell by a Workplace Safety and Health (WSH) 85.7% from 14 cases to two in 2020. Advocate at each of our bus depot and interchange in 2020. These Advocates, Our bus accident rate was 0.09 cases who are members of the safety or 220 accidents per 100,000 bus-km. committee, participate and execute This was a significant improvement the WSH Management System and compared to 0.12 cases or 310 accidents are the point of contact for day-to- day safety and health matters at their respective sites.

WORK-RELATED Injury cases amongst rail staff and contractors fell by 85.7% from 14 cases to two in 2020

WORKPLACE SAFETY PG 76 ANNUAL REPORT 2020

10,670 employees in 2020 2020: 3% less than 2019 Employees by Gender 89.8%: male employees 11.2%: female employees

Employees by Age Profile 40%: over 50 years old 50%: between 30 and 50 years old 10%: below 30 years old

We also produced an educational video We believe that diversity in the workplace which was complemented by a series is fundamental to growth and professional of posters to reinforce safe habits and development. It benefits both the behaviour as we worked towards a zero individual and the Corporation as it brings rate of accidents due to slips, trips and new perspectives to the way we work falls at the workplace. and operate through different ideas, skills and attitudes. A diversified workforce SAFETY CERTIFICATION AND RECOGNITION – whether in terms of gender, race or Our Bus division as well as the NEL and nationality – also means that we have DTL are successfully certified under access to the widest talent pools. the ISO 45001 Occupational Health and Safety Management Systems. This In 2020, we had 10,670 employees, which demonstrates our compliance in meeting was 3% less than 2019. BCs are our largest requirements under its framework category of employees, accounting to improve employee safety, reduce for 58% of our workforce with 50% of workplace risks as well as create better them being Singaporeans and Singapore and safer working conditions. Permanent Residents, 41% Malaysians and the rest Chinese nationals. Our good safety records also received recognition from the LTA. Our DTL was Nine in 10 employees or 89.8% honoured with the “Safe Rail Line of the were males which is expected in our Year (Excellence)” award - which it won traditionally male-dominated business. twice in the award’s three-year history – The number of female employees, while our Tampines Bus Package received however, fell slightly by 3.5% in 2020. the merit award in the “Safe Bus Operator of the Year” category. For the year in review, we recruited 1,101 new employees, which comprised 10% of EQUAL OPPORTUNITY EMPLOYER our total workforce. We continued to Our people are at the very heart of our recruit BCs with a new recruitment business and our greatest asset. campaign – “Make A Difference, Everyday” We strongly believe that a happy and – to focus on building a strong local core. engaged workforce translates into As at 31 December 2020, we successfully providing a higher standard of service recruited more than 550 Singaporeans and for our commuters. In the long run, Permanent Residents including 133 former we can only result in growth for our taxi drivers and private hire drivers who had organisation. switched careers due to the pandemic.

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As an equal opportunity employer, We are also mindful about upskilling close to half of our workforce was aged and equipping our staff to keep their between 30 and 50 years old. Staff over skills relevant in a changing landscape. 50 years old made up 40% while those To support the roll-out of electric below 30 years old comprised 10%. buses, training was conducted for both operational and engineering staff, just as EMPLOYEE SKILLS AND TALENT DEVELOPMENT it was done for the diesel hybrid buses. We are committed to developing a competent and future-ready workforce. In the area of customer service, training Be it new or experienced staff, we on the new CARES 4.0 continued to be invest continually to develop their conducted to enable staff to share our skills and talent. In 2020, we provided service philosophy of providing Caring, 57,686 training places or an increase of Agile, Reliable, Safe and Secure service. 18.3% compared to the previous year’s Building on the CARES culture, which was 48,773. Each employee averaged 25.73 established in 2008, this service initiative training hours which was a drop of 31.2% continues to evolve to meet changing compared to 2019 due to the COVID-19 commuter needs. In 2020, a survey outbreak. finding revealed that 99.3% of staff were familiar with our CARES culture In line with the Industry Transformation and 1,270 staff have participated in the Map for the land transport sector, we new programme. continued to work with SkillsFuture Singapore (SSG) to develop certified As part of our efforts to attract and training courses under the Singapore retain engineering talent and to develop Workforce Skills Qualifications (WSQ) professional competency, we encourage programme to raise the competency our engineers to be certified as Chartered standards of our public transport workers. Engineers accredited by the Institution of We now have 533 skills framework Engineers, Singapore. In 2020, we have 26 accredited modules for our bus and Chartered Engineers in our rail division. rail employees. Our bus technicians also obtained With the requirement to observe safe certification as Bus Technical Specialists distancing, e-learning modules rolled out from the Singapore Bus Academy’s Bus at an accelerated pace and with more Technical Specialist Certification Centre areas of focus added such as security (BTSCC), which comes under the LTA. and cybersecurity awareness. A learning We now have 75 technicians who have application was also introduced for obtained certification at Level 1 and employees to receive training using their another 30 at Level 2 of the programme. handphones; making access to learning new skills and knowledge convenient.

A learning application was introduced for employees

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To encourage our employees to deepen Throughout 2020, schools and their knowledge in specialised areas, community groups also rallied behind we offered sponsorships for their studies. our frontline staff with their show of care As of December 2020, half of the 53 staff and support. They made cards, wrote have completed their diploma courses encouraging messages and carted snacks in either electrical engineering from the and care packs to cheer on our staff who Ngee Ann Polytechnic or engineering put their own health on the line to keep in rapid transit technology from the Singapore moving. Singapore Polytechnic. Our care for our employees is also Besides technical skills, we also focussed extended to their family members in the on training in soft skills such as effective form of annual education awards. For leadership as part of our people’s 2020, 73 of our employees received a career development. To enhance our total of $171,400 in education awards. BCs’ leadership skills and to increase the possibility of them being able to switch to alternative career pathways EMPLOYEE AWARDS AND RECOGNITION such as becoming managers at the bus interchanges, we put them through a structured “Basic Management Programme”. Management staff, on the other hand, attended leadership courses to hone their capabilities.

EMPLOYEE ENGAGEMENT With the pandemic, we took the digital route to stay in touch with our people. For the first time, we produced videos to inform, persuade and galvanise our workforce to keep morale high.

For our BCs who are constantly on the move, we introduced e-services where they can use a mobile application, iLink, on their handphones to perform a host of administrative functions such as checking on work rosters and payslips, applying leave, reporting bus faults and even viewing of their personal driving competency. Company news, safety alerts and advisories are also available on the application.

When it comes to building staff morale, we take the lead in appreciating the contributions of our employees. COVID-19 did not dampen our plans for our annual CARES Kindness Month as we took the digital route in inviting the We also took time to recognise and thank schools to show their appreciation to our our staff for their years of long service staff. In all, we received close to 2,000 with the Company. Long service awards appreciation notes/videos in November were handed out to 300 employees, who 2020, which was a 30% increase had served between 15 and 35 years. compared to 2019. Another 129 employees were appreciated at retirement ceremonies.

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Employees who provided quality Industrial Arbitration Court ruled that the service to our commuters also received Company had acted in accordance with recognition for their good efforts. At our the Employment Act in relation to the rest internal CARES quarterly awards in 2020, days, working hours and overtime. Legal 1,062 staff were honoured for providing proceedings are still ongoing. caring, reliable, safe and secure services to our commuters. INCLUSIVITY IN PUBLIC TRANSPORTATION In 2020, all 226 of our bus services are Another 166 employees also did us wheelchair friendly with 100% of our fleet proud at the National Kindness Awards – being wheelchair-accessible. Transport Gold 2020. Three received the Outstanding Award while the other 163 earned the Commendation Award.

At the national Excellent Service Award 2020 (EXSA), 2,000 staff were honoured with 38% being first-time winners while 18.9% were Star winners, which is the highest tier of the award. On a company level, 62% of our staff have won at least one EXSA award.

Three of our staff also received recognition at the Asia-Pacific Customer Relationship Excellence Awards (CREA), with two of them topping their respective categories - “Customer Service Team Leader of the Year 2020” and “Customer To continue to foster empathy in our Service Professional of the Year 2020”. frontline staff for commuters who need extra care and attention, we produced INDUSTRIAL RELATIONS training engagement videos as part of SBS Transit believes in developing and our CARES programme. This quick guide sustaining a harmonious tripartite labour- video series included topics on assisting management relationship with 89% of commuters such as those our non-executive staff covered by a with visual and physical disabilities, Collective Agreement that has been and the elderly. signed with the National Transport Workers’ Union. Meanwhile, we continued to assist the LTA in their trials on the use of assistive Working hand-in-hand in the spirit of technologies for the visually and hearing mutual respect and trust, Management impaired commuters to enhance their and Union constantly collaborate public bus travel experience. to improve the welfare and well- being of employees. To ensure that To build the confidence of students communication channels are always with special needs to travel safely and kept open, union members are elected independently on public buses, we and appointed as union leaders to provide donated two decommissioned buses – the crucial link between Management one to the St. Andrew’s Autism School and and Union. the other to the Chao Yang Special School which is managed by the Association of In 2020, the number of BCs who Persons with Special Needs – to their commenced legal proceedings against schools. With the buses on their school the Company stood at 13. This is in grounds, they learn what to expect and relation to, amongst others, working how to manage their way around as part hours, rest days, overtime pay and of their training curriculum. allowances. In November 2019, the

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A bus was also donated to the Tan Tock convenient platform for commuters to Seng Hospital for use in helping patients provide feedback about our trains and rehabilitate as they integrate back into MRT stations. This brings the list of our the community and resume regular feedback channels to seven, making us routines such as boarding/alighting more accessible to our commuters in from public buses. both the digital and physical worlds.

Besides this, we conducted several Our commuters took the time to write in engagement sessions with some 40 to recognise and encourage our efforts in commuters who are physically or visually improving our service. A total of 40,595 handicapped and their caregivers through compliments and commendations were their social service agencies to find out received in 2020, which was a 32.1% more about their travelling experiences. drop compared to 2019, due to the drop Over these sessions, we gained helpful in public transport ridership as a result insights that helped us look at new ways of the pandemic. The number of valid to be even more inclusive in how we complaints received also declined by deliver our services. We will continue to 15.0% to 3,752 as compared to 2019. In conduct more of these sessions regularly. terms of complaints, about half of them were about the behaviour of our BCs. COMMUTER ENGAGEMENT AND SATISFACTION Management has formed a task force to To contribute to pleasant journeys for address this aspect, which will include our elderly commuters, we organised identifying and retraining BCs as needed. campaigns to reinforce safety messages. At the NEL Chinatown Station, besides Our efforts in serving our commuters the display of posters to remind them bore fruit as evidenced in the annual to hold on firmly to the handrails on Customer Satisfaction Index of Singapore the escalators, we also piloted public that was administered by the Singapore announcement safety messages Management University’s Institute of in Chinese dialects – Hokkien and Service Excellence. Conducted from May Cantonese – besides English and to July 2020, SBS Transit topped the list in Mandarin. In 2020, there were zero both the Public Bus and MRT system sub- injuries arising from the improper use sectors. Our bus scored 75.4 compared to of the escalator that was involved in the the industry’s 74.4 while our rail achieved pilot. We will continue to look at other 75.3 compared to the industry’s 73.4. creative ways to encourage and remind our elderly commuters to make travel Our steady efforts to boost our rail safe and pleasant for them. On buses reliability was also evidenced in the Public and at our bus interchanges, we put up Transport Council’s annual commuter posters to remind commuters to hold satisfaction survey that was conducted on to support at all times to reduce the from October to November 2020. incidence of bus falls among the elderly. Similarly, our Rail outperformed the industry with a 98.8% rating compared We supported the LTA in its public to the 97.9% and a mean score of 8.1 education campaign to promote compared to the 7.9. safe travelling habits on public buses. Roadshows were held at the Tampines Overall, SBS Transit’s and the industry’s and Bishan Interchanges, prior to the public transport mean satisfaction score outbreak of the COVID-19 virus, to remained at 7.8 out of 10, which was distribute educational leaflets while similar to 2019. staff were deployed to share key safety messages on the ground. Videos We also commissioned an independent highlighting safe commuting behaviour survey firm to conduct commuter were also played on electronic screens in satisfaction surveys involving 1,000 our bus interchanges. commuters each for our DTL and NEL. The findings indicate that 97.8% of With the wide spread use of QR codes respondents were “satisfied” or “very during the pandemic, we made use of satisfied” with our DTL services while the this technology to offer another new and NEL received a score of 94.9%.

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In our Adopt-a-Station/Interchange programme, we work with schools to GAVE $530,000 develop their students’ leadership skills or in cash offer a platform to showcase their artistic sponsorships talent to enhance commuters’ experience. towards charity, In 2020, we worked with the Methodist community and Girls’ School to put on display a series of industry causes 28 posters in the DTL Sixth Avenue Station, which it adopted. The posters carried uplifting messages such as “Dawn comes after the darkness. Stay Strong. Together SUPPORT FOR THE NEEDY AND COMMUNITY we will get through this!” and we took the ENGAGEMENT opportunity to put up the posters at more In 2020, we gave away more than stations to encourage our commuters $530,000 in cash sponsorships towards during the difficult pandemic days. charity, community and industry causes. GOVERNANCE Unclaimed articles that had been left behind on our buses and trains and at our PHYSICAL SECURITY bus interchanges and MRT stations were In security management, we continued donated to the Red Cross for sale at its to apply the Threat Oriented Person thrift shops. The funds raised go towards Screening Integrated System (TOPSIS), its humanitarian efforts to help the which was developed by the Ministry of disabled and less fortunate in Singapore. Home Affairs (MHA), for the detection and screening of suspicious persons on Rental-free spaces were provided to the our premises. We launched an e-learning Temasek Foundation to install vending package for this where about 3,700 staff machines to distribute free masks to the have completed the programme. community during the pandemic while advertising spaces on our buses and Besides this, regular security training and trains and at our premises were provided exercises continued to be conducted to promote campaigns such as “Speak to enable our frontline staff to respond Mandarin”. We also offered free use of promptly and appropriately to potential publicity spaces to external agencies such security threats and situations. Security as the Police which promoted awareness briefings conducted by the MHA and of crime prevention habits among the the Singapore Police Force were also community. organised to keep our employees updated on the dynamic security environment. We also made visits to the Bright Hill Evergreen Home, which is located In spite of the pandemic, we continued to along the corridor of our Punggol Light organise our annual security conference Rail Transit system, to bring cheer and which covered both physical and cyber practical gifts to the residents who are ill, security to promote staff security awareness. disadvantaged and elderly. Conducted online, it was also attended by the LTA, the Cyber Security Agency and the In our school engagement programme, Police. TOPSIS Awards were presented to we reached out to students through staff and contractors to recognise their assembly talks and visits to our bus security vigilance and alertness. interchanges, MRT stations and depots to highlight safety and graciousness To test the effectiveness of our training in public transportation to engender a and the vigilance of our staff, we positive commuting culture. In 2020, conducted more than 750 Red Teaming more than 5,000 students participated in exercises to validate their responses in the programme, which was a sharp drop detecting and handling security threats. compared to some 24,000 in 2019 due to In 2020, more than 750 of such exercises the COVID-19 outbreak. were carried out. We also engaged an

PG 82 ANNUAL REPORT 2020

external organisation to perform an Meanwhile, we continued with our independent security audit and no major online cybersecurity training programme non-compliance issues were uncovered. which is designed with six modules. It provides our staff with basic cybersecurity In contingency planning, we were not awareness and will be made mandatory as able to conduct ground deployment a pre-requisite for anyone accessing the exercises due to COVID-19 restrictions. Company’s IT system. However, we conducted these exercises virtually so as to continue to review DISCRIMINATION AND CORRUPTION and validate our emergency response AT THE WORKPLACE preparedness plans in managing rail Our policy of non-discrimination guides service disruptions as well as responses our human rights and labour practices. to terrorist events involving potential In 2020, there were no reports of bomb threats, emergency situations and discrimination filed. cybersecurity threats. Three exercises were conducted in 2020 - “Exercise As a responsible corporate citizen, Endeavour”, “Exercise Harmony” and we also do not condone any corrupt “Exercise Pinnacle”. practices or anti-competitive behaviour when our employees deal with suppliers. We also organised exercises where Hence, we have put in place a strict external agencies were invited to observe procurement policy which, among other and validate our plans and processes. things, conducts supplier assessment to “Exercise Unicorn” was conducted at ensure that there is no adverse impact on both the NEL and SPLRT depots while society. In 2020, we have zero incident “Exercise Phoenix” was held at DTL’s of corruption or fraud in the workplace Gali Batu Depot to validate our response involving our staff. and management plans in dealing with security threats. The LTA and the Police More details of our Sustainability efforts, Public Transport Security Command including the GRI Content Index, can attended as observers in the table-top be found in the Sustainability Report of exercises. our parent company, ComfortDelGro Corporation Limited. CYBERSECURITY Remote working has become the new norm as the COVID-19 pandemic brought a paradigm shift in the way we work. To enable staff to operate effectively from remote locations without putting COMPLIANCE TO our information assets at risk, security measures were implemented in our virtual THE CYBERSECURITY private network. CODE OF PRACTICE FOR CII As a Critical Information Infrastructure (CII) owner, we continually review our security processes and control measures to ensure that we comply with the requirements of the Cybersecurity Act. This included independent assessment of our compliance to the Cybersecurity Code of Practice for CII, annual security awareness briefings to staff and vendors, risk assessments and cyber security CORRUPTION incident response exercises to test our CASES state of preparedness.

PG 83 SBS TRANSIT LTD CORPORATE GOVERNANCE

SBS Transit Ltd (SBS Transit or the Company, and together with its subsidiary, the Group), believes that the fundamental measure of our success is about creating long-term shareholder value.

We will continue to: 1. BOARD MATTERS

• Focus relentlessly on our customers; The Board of Directors (the Board) has a duty to protect and enhance the long-term value of the • Make corporate decisions to generate long-term Company and achieve sustainable growth for the value rather than for short-term considerations; Group. It sets the overall strategic direction of the Company and oversees the proper conduct of the • Maintain our lean culture through cost efficiencies business, performance and affairs of the Group. to drive value creation; Board members are expected to act in good faith and exercise independent judgement in the best interests • Hire and retain skilled and dedicated Employees; of the Company. and In appointing Directors, the Company seeks • Look for sustainable ways to protect the individuals who have integrity, expertise, business environment. acumen, shareholder orientation and a genuine interest in the Group. CORPORATE GOVERNANCE STATEMENT PRINCIPLE 1: THE BOARD’S CONDUCT OF AFFAIRS SBS Transit strongly believes that good Corporate Governance makes good business sense. To this end, BOARD’S ROLE AND RESPONSIBILITIES the Company maintains the highest standards of At the helm of the decision-making process of the Corporate Governance, professionalism and integrity Company is the Board. The Board is headed by the as we build an organisation that our Shareholders, Non-Independent and Non-Executive Chairman, Mr Employees, Business Partners, the Authorities and Lim Jit Poh (the Chairman), and is responsible for: other Stakeholders can trust and be proud of. (i) Providing entrepreneurial leadership and The Company is committed and adheres to the Code guidance, setting strategic directions and of Corporate Governance issued by the Monetary objectives of the Group (which include Authority of Singapore dated 6 August 2018 (the appropriate focus on value creation, innovation Code) and ensures that it is upheld throughout and sustainability) and ensuring that adequate the Group. The Company has adopted a Code of financial and human resources are in place to Business Conduct, which sets out the principles achieve the objectives; and policies upon which the Company’s businesses are to be conducted, and also implemented a (ii) Ensuring that appropriate and adequate systems Whistle Blowing Policy which provides a mechanism of internal controls, risk management processes for Employees to raise concerns about possible and Financial Authority Limits are in place to improprieties in financial reporting or other safeguard Shareholders’ interests and the Group’s improper business conduct, whilst protecting the assets, and to achieve an appropriate balance whistleblowers from reprisal within the limits of the between risks and company performance; law. (iii) Challenging Management constructively and This Report sets out the Corporate Governance monitoring its performance; practices that were in place during the Financial Year ended 31 December 2020 (FY 2020), with specific (iv) Identifying the key Stakeholder groups and references to the Code. For FY 2020, we are pleased guiding Management in the Company’s strategy to report that the Company complied in all material and approach in addressing the concerns of these respects with the Code. key Stakeholder groups, and ensuring transparent and accountability to all Stakeholders;

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(v) Instilling an ethical corporate culture and ensuring provided. As required under the SGX Listing Rules, the Company’s values, standards, policies and a new director who has no prior experience as a practices are consistent with the culture; and director of a company listed on the SGX-ST must undergo training as prescribed by the SGX-ST. Such (vi) Considering environmental, social and training should be completed within one year of governance issues as part of its strategic appointment. formulation on sustainability. Directors are encouraged to undergo continual INDUCTION, TRAINING AND DEVELOPMENT OF DIRECTORS professional development by attending relevant Upon appointment as a Director, the Chairman will training programmes, seminars and courses issue an official letter of appointment to the Director, organised by the Singapore Institute of Directors which clearly sets out his/her role, duties and (SID) and other professional bodies to enhance their responsibilities as a director of the Company. knowledge and skills and better equip themselves to effectively discharge their duties as a Director of the Management will conduct a comprehensive Company. The fees for the courses are paid for by the orientation programme for newly appointed Company. Directors, which include duties as a director and how to discharge those duties, key aspects of The Company Secretaries also update and brief the businesses, including financial and Corporate the Board on Corporate Governance practices and Governance policies are also discussed. Site visits changes in or updates to the relevant legal and will also be arranged for new Directors so that they regulatory requirements pertaining to the Group’s can better familiarise themselves with the Group’s businesses. External consultants are also engaged operations. When a Director is appointed to a Board to conduct seminars on specific topics as and when Committee, he/she is provided with its terms of necessary. reference. Due to the COVID-19 pandemic started in early 2020, If the newly appointed director has no prior there were no internal training programmes being experience as a director of a company listed on organised in 2020 for the Directors. However, some the Singapore Exchange Trading Limited (SGX-ST), Directors continued to attend external courses/ training in relevant areas such as regulatory, finance seminars as listed below: and legal as well as industry-related areas will be

DATE TRAINING PROVIDER TOPIC ATTENDED BY: 16 Jan 2020 SID Audit Committee Seminar 2020 (1) Ms Lee Sok Koon; and (2) Dr Tan Kim Siew

25 Feb 2020 SID Financial Reporting Fundamentals (1) Ms Chua Mui Hoong

Regular presentations are made by Management to in existing subsidiary/associate, investment in the Board to enable Directors to better familiarise financial instruments, tender for businesses above themselves with the Group’s businesses. Site visits the prescribed limits, assessing and approving key for the Board are also organised from time to time business decisions, funding and investment initiatives to enable Directors to learn more about the Group’s and other corporate actions, including approval of operations. During such visits, Directors spend time the Financial Authority Limits, Annual Budget and with Management to discuss key strategies and Capital Expenditure and the release of Financial policies pertaining to, not just Company specific Results to the SGX-ST via SGXNET. In addition, operations, but also the Group’s businesses in the acceptance of credit facilities from banks, the general. Such meetings help Directors to be better establishment of capital market programmes and the equipped to make informed decisions relating to the issuance of debt instruments require the approval of future direction of the Group. the Board.

RESERVED MATTERS The Board periodically reviews the adequacy and SBS Transit has adopted clear, established and effectiveness of internal controls, risk management documented internal guidelines setting forth and Financial Authority Limits to ensure that while certain matters that require the Board’s approval. there is delegation of authority, there are sufficient Under these guidelines, Board approval is required checks and balances in place to monitor such with regard to matters such as acquisition of delegation. businesses, disposal or changes in equity interests

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CONFLICTS OF INTEREST quality standards, customer service and safety. The All Directors are required to avoid situations where SQC also reviews customers’ feedback on service their own personal or business interests may conflict quality. The SBSTTC was established with the terms of or appear to conflict with the interests of the reference to oversee the Group’s bus and rail tender Company. Where a Director has a conflict of interest, strategies and provide guidance on bid preparations. or it appears that he/she might have a conflict of interest in relation to any matter, he/she must Although the Board Committees are empowered immediately declare his/her interest at a meeting to make their own decisions, the Board is ultimately of the Directors or send a written notice to the responsible for all decisions made by the Board Company containing details of his/her interest in the Committees. matter and the actual or potential conflict, and recuse himself/herself from participating in any discussion or DIRECTORS’ ATTENDANCE AT BOARD AND BOARD COMMITTEE decision on the matter. MEETINGS At least four scheduled Board Meetings are held every DELEGATION BY THE BOARD year at regular intervals for the purpose of reviewing To assist the Board in the detailed consideration of the results and ongoing performance of the Group the various issues at hand and to facilitate decision- notwithstanding that the Financial Results are only making, five Board committees were formed, namely, announced semi-annually. The Board Meetings to the Audit and Risk Committee (ARC), the Nominating approve the half yearly financial results are held Committee (NC), the Remuneration Committee (RC), within 45 days after the end of the first half of the the Service Quality Committee (SQC) and the SBST financial year, and not later than 60 days after the end Tender Committee (SBSTTC) (collectively, the Board of the financial year for the full year financial results, Committees). Ad hoc committees are also formed to while the Board Meeting to approve the Annual look at specific issues from time to time. Budget is held in last quarter of each year after all the Budgets of the subsidiaries have been approved Each Board Committee is governed and regulated by by their respective Boards. Ad hoc Board and Board its own terms of reference, which sets out the scope Committee Meetings are also held from time to time of its authority, duties and responsibilities, regulations when the need arises. and procedures governing the manner in which the Board Committee is to operate and how decisions Directors who are unable to attend meetings in- are to be taken. person, are able to participate in the discussions through video/audio/tele-conferencing. Decisions The terms of reference and summary of the activities of the Board and Board Committees on matters in of the ARC, NC and RC are described in further detail the ordinary course of business may also be obtained in the relevant sections below. The SQC’s terms of via circular resolutions. Directors are free to seek reference are to provide strategic directions and clarifications and explanations from Management on review initiatives to enhance the Group’s service the reports and papers submitted to the Board.

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ATTENDANCE OF DIRECTORS AT ANNUAL GENERAL MEETING, BOARD AND BOARD COMMITTEE MEETINGS IN 2020

BOARD AUDIT & RISK NOMINATING REMUNERATION SERVICE SBST TENDER ANNUAL COMMITTEE COMMITTEE COMMITTEE QUALITY COMMITTEE GENERAL COMMITTEE MEETING

No. of No. of No. of No. of No. of No. of No. of No. of No. of No. of No. of No. of No. of No. of meetings meetings meetings meetings meetings meetings meetings meetings meetings meetings meetings meetings meetings meetings Name held attended held attended held attended held attended held attended held attended held attended Lim Jit Poh 44--1122--2211

Yang Ban 4 4 3 3a 1 1a 2 2a - - 2 2 1 1 Seng(b) Lim Seh Chun 4 4 3 3 1 1 ------1 1

Chua Mui 4433----22--11 Hoong John De Payva 44----2222--11

Susan Kong 44--1122--2211 Yim Pui Lee Sok Koon 4433----222211

Lim Siang Hoe 443311------11 Benny Tan Kim Siew 4433----22--11

Yu Ching Man 44----22222211

Notes: a) Attended meetings by invitation of the Committee. b) Mr Yang Ban Seng ceased to be an Executive Director with effect from 1 March 2021.

ACCESS TO INFORMATION of the Directors, the Company will arrange for the Prior to each Board and Board Committee Meeting, appointment of relevant professional advisers at its and where needed, Management provides Directors own cost. with complete, adequate and timely information. The Board also receives monthly management accounts, COMPANY SECRETARIES updates on key performance indicators and quarterly The Company Secretaries assist in organising Investor Relations (IR) Reports covering IR activities Board and Board Committee Meetings, prepare and updates of analysts’ and investors’ views and the agenda in consultation with the Chairman, the comments. This enables the Board to make informed Chief Executive Officer (CEO)/Acting CEO and the and sound business decisions and be kept abreast Chairperson of the respective Board Committees. of key challenges, opportunities and developments The Company Secretaries attend all Board and for the Group. As a general rule, reports to the Board Board Committee Meetings. The Company and Board Committees are disseminated to Directors Secretaries keep the Directors informed of any prior to meetings to provide sufficient time for significant developments or events relating to the review and consideration, so that discussions at the Group, including compliance with all relevant rules meetings are productive and effective. All information and regulations. The Directors have separate and is encrypted if distributed electronically. independent access to the Company Secretaries. The appointment and removal of the Company INDEPENDENT PROFESSIONAL ADVICE Secretaries are subject to the approval of the Board. Directors can request for additional information and has full access to Management. Management PRINCIPLE 2: BOARD COMPOSITION AND GUIDANCE provides information requested by Directors for its meetings and decision making in a timely manner. BOARD INDEPENDENCE Should there be a need to obtain independent As at 31 December 2020, the Board comprised ten professional advice on matters relating to the (10) Directors with 80% independent Directors. businesses of the Group or issues affecting the duties

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There is a strong level of independence in the Board. and careful review, taking into consideration various Except for the Chairman who is a Non-Independent factors, in assessing the independence of a Director. Non-Executive Director and the Executive Deputy These factors include, inter alia, if the Director has Chairman who is a Non-Independent Executive any interest, business, relationship and/or any other Director, all the remaining eight Non-Executive material contractual relationship with the Group Directors (NED) are considered by the NC to be which could reasonably be perceived to compromise independent. The current board composition his/her independence and interfere with the exercise exceeds the requirement under the Listing Rules of his/her independent business judgement. The and the Code for at least one-third of the Board Board is of the view that all independent Directors to comprise independent Directors where the remain independent in the exercise of their Chairman is not independent. The Chairman is a judgement on Board matters. nominee of ComfortDelGro Corporation Limited (ComfortDelGro), a Substantial Shareholder of the INDEPENDENT JUDGEMENT Company and is therefore non-independent. As such, All Directors are aware of their fiduciary duties and a Lead Independent Director has been appointed with exercise due diligence and independent judgement in effect from 1 January 2013. The Chairman and the ensuring that their decisions are objective and in the CEO/Acting CEO are different persons and are not best interests of the Company and its Group. immediate family members. The Chairman is also not part of the Management team. No person will be able BOARD SIZE, COMPOSITION AND COMPETENCY to influence the decisions of the Board as the over- The NC examines the size and composition of whelming majority of the Directors are independent the Board and the Board Committees annually to NEDs. ensure an appropriate balance and diversity of skills, knowledge, experiences, age and gender and the The NC is responsible for assessing the independence size is conducive to effective discussion and decision of the Directors on an annual basis. Each making, with an appropriate number of independent Director is required to complete a Confirmation Directors. The NC also takes into consideration the of Independence checklist which is drawn up in promotion of tripartism experience from labour, accordance with the guidelines provided in the Code government and business, to foster constructive and requires each Director to assess his/her own debate to enhance the Board’s ability to discharge its independence. The Director is required to declare any duties and responsibilities effectively. circumstances in which he/she may be considered non-independent. The NC will then review the The bulk of the Group’s businesses is regulated. Confirmation of Independence to determine whether Having considered the scope and nature of the a Director is independent. The NC deems a Director operations of the Group and the requirements of its who is associated with a Substantial Shareholder in businesses, the NC and the Board are of the view that the current and immediate past financial year as non- the current size of ten (10) Directors is appropriate. independent. Mr Lim Jit Poh, chairman of the Board is deemed as non-independent as he is a nominee The Group is committed to building an open, and Chairman of the Board of ComfortDelGro. Mr inclusive and collaborative culture and recognises the Yang Ban Seng, the Executive Deputy Chairman is importance of all aspects of diversity in supporting also deemed as non-independent as he is also a the achievement of its strategic objectives, growth nominee and the Managing Director/Group CEO of and sustainable development. ComfortDelGro. The Board recognises the merits of gender diversity As at 31 December 2020, Mr John De Payva is the in relation to composition of the Board and in only one out of the eight independent Directors, who identifying suitable candidates for new appointments has served on the Board for more than nine years. to the Board would ensure that female candidates are The NC takes the view that a Director’s independence included for consideration. As at 31 December 2020, should not be determined solely and arbitrarily out of ten directors on the Board three of them or on the basis of the length of service. A Director’s 30% are females. contribution in terms of experience, expertise, professionalism, integrity, objectivity and independent The Directors are individuals with leadership judgement in engaging and challenging Management experiences in business, government and the labour in the best interests of the Group as he/she performs movement and with a broad diversity of expertise his/her duties in good faith, are more critical and experience including accounting, finance, legal, measures in ascertaining his/her independence than engineering, internal security, media, regulatory and the number of years served on the Board. Hence, business management. Each Director provides a the Board does not impose a limit on the length of valuable network of industry contacts and brings in service of the independent Directors. In taking a different perspectives and ideas at Board discussions. holistic approach, the Board and the NC exercise due

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The NC is satisfied that the Board and Board of the Board and Board Committees reflects our Committees comprise Directors who as a group commitment to all aspects of diversity. provide an appropriate balance and diversity of skills, knowledge, experience, age and gender, and The individual profile of the Directors, their listed core competencies required for the Board and company directorships and principal commitments Board Committees to discharge their responsibilities held currently and in the preceding five years, are effectively and ensure that the Group continues to found in the ‘Board of Directors’ and ‘Directors’ be able to meet the challenges and demands of the Particulars’ sections on pages 54 to 59 and pages 104 markets in which it operates. The current makeup to 107 of this Annual Report.

BOARD INDEPENDENCE 80%

10% 10%

Independent Non- Non- Non- Independent Independent Executive & Non- & Executive Director Executive Director Director

BOARD GENDER DIVERSITY

30% 70%

DIRECTORS’ LENGTH OF SERVICE

Served > 9 years 20%

Served < 9 years 80%

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NON-EXECUTIVE DIRECTORS’ PARTICIPATION (iv) Encourages constructive relations within the All the NEDs have unrestricted access to the Board, between the Board and Management and Management and are well supported by accurate, the Board and the CEO/Acting CEO; and complete and timely information, including monthly and quarterly performance reports. They participate (v) Promotes high standards of Corporate actively at Board and Board Committee Meetings Governance and transparency. to constructively challenge Management and help develop proposals on business strategy and other The CEO/Acting CEO is given full executive business and governance issues and also review the responsibility for the management of the Group’s performance of Management in meeting agreed businesses and the implementation of the Group’s goals and objectives and monitor the reporting of strategies and policies as decided by the Board and performance. reports to the Board on a regular basis.

All the members of the ARC, RC, and NC are NEDs. The Chairman and the CEO/Acting CEO represent There is no executive Director on these Board the Board at official functions and meetings with Committees. Shareholders and other Stakeholders such as employees, regulators and customers. A detailed The Chairman, who is not a member of the ARC, description of our engagements with Stakeholders meets with the chairman of the ARC and External can be found from pages 74 and 83 of our Auditors annually in the absence of Management. Sustainability Report. From time to time when required, the NEDs led by the Lead Independent Director meet without Mr Yang Ban Seng has been the Executive Deputy the presence of Management before or after Chairman of SBS Transit Ltd. since 15 January 2019. Board Meetings. The chairman of such meetings He has relinquished his appointment as Executive provides feedback to the Board and/or Chairman as Director with effect from 1 March 2021, following appropriate. the appointment of Mr Cheng Siak Kian as Chief Executive Officer on the same date. Mr Yang was PRINCIPLE 3: CHAIRMAN AND CHIEF EXECUTIVE OFFICER re-designated as Deputy Chairman and Non- Independent and Non-Executive Director of SBS ROLES OF CHAIRMAN AND THE CHIEF EXECUTIVE OFFICER Transit Ltd on 1 March 2021. (CEO)/ACTING CEO The roles of the Chairman and the CEO/Acting LEAD INDEPENDENT DIRECTOR CEO are kept separate and distinct to ensure Consistent with the Code, as the Chairman is deemed an appropriate balance of power, increased non-independent, the Board unanimously appointed accountability and greater capacity of the Board for Professor Lim Seh Chun as the Lead Independent independent decision making. This is a deliberate Director with effect from 26 April 2019. Professor Lim policy agreed by the Board and one that is strictly is the Chairman of the NC and a member of the ARC. adhered to. This ensures Management accountability and Board independence. The Chairman is PRINCIPLE 4: BOARD MEMBERSHIP responsible for the effective functioning of the Board, while the CEO/Acting CEO is responsible There is a formal and transparent process for the for the operations and management of the Group’s appointment and reappointment of Directors to the businesses. The Chairman and the CEO/Acting CEO Board, taking into account the need for progressive are not related. renewal of the Board.

The Chairman: NOMINATING COMMITTEE As at 31 December 2020, the NC comprised four (4) (i) Leads the Board, facilitates effective contribution NEDs, of whom three including the NC chairman of all Directors, sets the agenda and promotes is independent. The NC is responsible for regularly comprehensive, rigorous and open discussions at reviewing the composition of the Board, identifying Board Meetings among the Directors, as well as and proposing suitable candidates for appointment to between the Board and Management; the Board and ensuring succession plans are in place. The renewal of Board membership is an ongoing (ii) Oversees the translation of the Board’s decisions process to ensure good governance and to maintain into executive actions; relevance in a changing business environment. All decisions by the NC are made by a majority of votes (iii) Ensures adequacy and timeliness of information of the NC members who are present and voting. flow between the Board and Management and The key terms of reference of the NC include the effective communications with Shareholders and following: other Stakeholders;

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(i) Review the Board’s succession plans and As a policy, the CEO/Acting CEO, being an make recommendations to the Board on all executive of the Company, besides adhering to the appointments and re-appointments of Directors guidelines set on the maximum number of board of the Company; representations on listed companies, will also have to seek the approval of the Chairman before accepting (ii) Assess the effectiveness fo the Board and Board any directorships of companies not within the Group. Committees and contribution by each individual In considering whether or not to grant the approval, Director; the Chairman will consider the time commitment of the CEO/Acting CEO and whether the new external (iii) Develop a process for performance evaluation of directorships will provide strategic fit and networking the Board, its Board Committees and individual for the businesses of the Group. The Chairman will Directors’ performance, including comparison also ensure that the CEO/Acting CEO will not accept with industry peers; and appointments to the boards of competitors.

(iv) Make recommendations to the Board on the As at 31 December 2020, all Directors comply with review of training and professional development the guideline on multiple board representation. programmes for the Board and the Directors. ALTERNATE DIRECTOR MULTIPLE BOARD REPRESENTATIONS Consistent with the Code, there is no alternate The NC subscribes to the view that it is important Director on the Board. for Directors to devote sufficient time and attention to the affairs of the Group. Consistent with the PROCESS FOR SELECTION, APPOINTMENT AND guidelines in the Code, the NC and the Board have RE-APPOINTMENT OF DIRECTORS adopted the following as a proactive step in ensuring As part of the Board Succession Plan, new Directors this: may be identified from time to time for appointment to the Board after the NC evaluates and assesses • A Director who is in full-time employment should their suitability in strengthening the diversity of skills, not serve as a Director on the Board of more than experience, age, gender, knowledge and relevant three listed companies; and core competencies of the Board whilst ensuring that there is a balanced tripartism experience • A Director who is not in full-time employment from government, labour and business to avoid should not serve as a Director on the Board of unproductive group-think and biasness. more than six listed companies. The process for selection of new Directors is as As the number of board representations should not follows: be the only measure of a Director’s commitment and ability to contribute effectively, the NC takes the (i) The NC assesses the desired competencies and view that if a Director wishes to hold more board attributes of the Board taking into account the representations than the maximum stated in the Group’s businesses and its strategic objectives. guidelines, a request must be made to the Chairman for approval. As a policy, the Chairman himself (ii) The NC then assesses the competencies should not hold more than six directorships in listed and attributes to include into the current companies if he is not in full-time employment and representation to achieve the desired mix. This not more than three directorships in listed companies forms the basis for selection of new Directors. if he is in full-time employment (iii) New Directors are sourced through various In assessing a Director’s contribution, the NC takes channels, including recommendations of a holistic approach. Focussing solely on Directors’ Directors and Management and if required, attendance at Board and Board Committee Meetings external search consultants. per se may not be an adequate evaluation of the contribution of the Directors. Instead, their abilities (iv) Potential candidates are interviewed by the NC to to provide valuable insights and strategic networking assess suitability and commitment. to enhance the businesses of the Group, availability for guidance and advice outside the scope of (v) The NC makes recommendations to the Board for formal Board and Board Committee Meetings and approval. contributions in specialised areas are also factors relevant in assessing the contributions of the Directors.

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In compliance with the Bus Service Industry Act 2015, of each individual Director, factors taken into Cap 30 and the Rapid Transit Systems Act, Cap 263A, consideration include attendance at AGM, Board and all appointments to the Board are subject to approval Board Committee Meetings and corporate activities, of the Land Transport Authority of Singapore. contributions in specialist areas and maintenance of independence. The performance criterion is The Constitution of the Company provides that determined by the NC and does not change from one-third of the Directors are subject to retirement year to year. and re-election by rotation at every Annual General Meeting (AGM). All Directors are required to retire In the last quarter of 2020, the NC conducted a from office at least once every three years. Re- performance evaluation of the Board, the Board election is, however, not automatic, and all Directors Committee and the individual Directors. The are assessed by the NC on their past performance performance evaluation which included key points and contributions before being recommended to on Board’s composition, Board’s contributions, Shareholders for re-election at the AGM. Newly contributions at Board Committees and conduct appointed Directors are also subject to retirement of proceedings and whether the Directors had and re-election at the AGM immediately following discharged their duties effectively. The findings their appointments. Independent directors who have were then presented by the Chairman of the NC to served or will be serving more than nine years on the Board during its meeting for deliberation and Board when Rule 210(5)(d)(iii) of the Listing Manual discussion on possible areas for improvement to come into effect on 1 January 2022 must subject enhance overall effectiveness. their independence to a two-tier shareholder vote. 2. REMUNERATION MATTERS At the forthcoming AGM, Mr Lim Jit Poh, Professor Lim Seh Chun, Mr John De Payva and PRINCIPLE 6: PROCEDURES FOR DEVELOPING Mr Lim Siang Hoe, Benny are due for re-election REMUNERATION POLICIES pursuant to Regulation 100 of the Constitution of the Company. Mr Lim Jit Poh, Mr John De Payva and SBS Transit recognises the importance of having a Mr Lim Siang Hoe, Benny will not be seeking re- skilled and dedicated workforce to manage and grow election and will retire at the conclusion of the the businesses in an increasingly competitive and forthcoming AGM. Professor Lim will be seeking challenging environment. It therefore places great approval on his continued appointment as an emphasis on motivating staff through engagement, Independent Non-Executive Director as he would recognition and an alignment of rewards to have been a director of the Company for an performance, as well as long-term interests of the aggregate period of more than 9 years and will cease Group and Shareholders. to be regarded as independent on and from 1 January 2022 pursuant to Rule 210(5)(d)(iii) of the Listing REMUNERATION COMMITTEE Manual if a two-tier shareholder vote has not been The RC plays an important role in the Group’s sought and approved prior to 1 January 2022. remuneration policies, as well as oversees the talent management and succession planning for KEY INFORMATION ON DIRECTORS Key Management Personnel. Besides providing the The profile of the Directors and key information are Board with an independent review and assessment set out in this Annual Report from page 54 to 59. The of Directors’ remuneration, it also reviews the Notice of AGM sets out the Director proposed for re- remuneration framework and strategy for executive election or re-appointment at the forthcoming AGM. compensation, with the purpose of developing talent Key information on Directors are also available on the and building leadership bench strength to ensure Company’s website. the Group’s continued success and enhancing shareholder value. PRINCIPLE 5: BOARD PERFORMANCE As at 31 December 2020, the RC comprised four (4) Each year, the Board undertakes a formal annual independent NEDs, of whom three including the RC assessment of its effectiveness as a whole, and that of chairman are independent. This is in accordance each of its board committees and individual directors. with the Code. The RC considers all aspects of remuneration including terms of their termination to The NC is delegated by the Board to undertake a ensure they are fair. Members of RC are independent process to assess the effectiveness of the Board of Management and also free from any business or in terms of overall performance and growth of other relationships, which may materially interfere the Group, achieving an adequate return for with the exercise of independent judgement. Shareholders, preventing conflicts of interest and balancing the competing demands of the Group. All decisions by the RC are made by a majority of In evaluating the contributions and performance votes of the RC members who are present and voting.

PG 92 ANNUAL REPORT 2020

Any member of the RC with a conflict of interest in The level and structure of remuneration of the Board relation to the subject matter under consideration and Key Management Personnel are appropriate would abstain from voting, approving or making and proportionate to the sustained performance recommendations that would affect the decisions of and value creation of the Company, taking into the RC. The CEO/Acting CEO is not present at and account the strategic objectives of the Company, does not participate in any RC discussions pertaining and it is appropriate to attract, retain and motivate to his own compensation and the review of his the Directors and Key Management Personnel to performance. He is, however, in attendance when successfully manage the Company for the long term. the compensation of Key Management Personnel is discussed. No Director is involved in deciding his or PERFORMANCE-RELATED REMUNERATION her own remuneration. The Group is committed to creating and enhancing shareholder value through growth that is sustainable The key terms of reference of the RC include the and profitable. The remuneration packages of the following: CEO/Acting CEO and Key Management Personnel comprise fixed and variable components, and (i) Oversee the talent management and succession is appropriate and proportionate to sustained planning for Key Management Personnel; performance and value creation of the Company. The variable component in the form of year end (ii) Review and recommend to the Board the performance bonuses, forms a significant proportion remuneration framework for compensation of the remuneration packages and is dependent to each Director, and ensure that the level of on the profitability of the Group and individual remuneration offered is appropriate to the level of performance. Subject to market conditions and contribution; the operating environment, the Group targets a total compensation package with fixed to variable (iii) Review and approve the remuneration of Key component ratios of 70:30 for Rank and File Management Personnel that is aligned with the Employees, 60:40 for Middle Management staff long-term interests of the Group to ensure that and 50:50 for Senior Management staff. The Group the overall remuneration package is attractive to believes that a higher proportion of performance retain and motivate Key Management Personnel; related component would ensure greater and alignment of interests of the employees with those of Shareholders and contributes to sustainable (iv) Review the Group’s obligations arising in the event performance and value creation in the long-term. of termination of Directors’ and Key Management Personnel’s services in a fair, reasonable and SHORT-TERM AND LONG-TERM INCENTIVE SCHEMES equitable manner, including the cessation of The SBS Transit Share Option Scheme expired in June financial incentives that have been earned but not 2010 and hence no option had been granted since yet disbursed due to exceptional circumstances of then. Eligible SBS Transit employees shall be eligible misstatement or misconduct. to participate in the ComfortDelGro Executive Share Award Scheme introduced in 2019. The RC has unrestricted access to the ComfortDelGro Group Chief Human Resource REMUNERATION OF NON-EXECUTIVE DIRECTORS Officer, who attends all RC meetings and provides The structure for the payment of fees to NEDs is the relevant market remuneration data and practices based on a framework comprising basic fees and to the Committee. The RC may also seek external additional fees for serving on Board Committees and independent expert advice on such matters where also for undertaking additional services for the Group. needed. In 2020, the Group continued to engage the The fees are subject to the approval of Shareholders services of an external consulting firm, Willis Towers at the AGM. Watson to conduct an Executive Compensation Benchmarking exercise for an independent review of The CEO/Acting CEO, being an executive of the Compensation package of its senior executives. the Group, does not retain any fees paid by the subsidiaries. Instead, fees due to him are paid by PRINCIPLE 7: LEVEL OF MIX OF REMUNERATION the subsidiaries to the Company. The CEO/Acting CEO does not receive Director’s fees for his Board The Company is transparent on its remuneration Directorship with the subsidiaries. policies, level and mix of remuneration, the procedures for setting remuneration, and the relationship between remuneration, performance and value creation.

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The Directors’ fee structure for 2020 is set out below:

BOARD BASIC FEE (PER ANNUM) Chairman $66,000

Deputy Chairman $49,500

Lead Independent Director $39,600

Member $33,000

ADDITIONAL FEES (PER ANNUM) AS

BOARD COMMITTEE CHAIRMAN MEMBER Audit and Risk Committee $22,000 $15,400

Nominating Committee $11,000 $7,700

Remuneration Committee $11,000 $7,700

Service Quality Committee $11,000 $7,700

SBST Tender Committee $11,000 $7,700

The attendance fees payable to Non-Executive Directors for attendance at each Board and Board Committee Meeting are as follows:

MEETINGS ATTENDANCE FEE (PER MEETING) In-person Dial-in

Board $1,000 $500

Board Committee $1,000 $500

* Directors are only paid one attendance fee even if two or more meetings are held on the same day.

PRINCIPLE 8: DISCLOSURE ON REMUNERATION

REMUNERATION OF DIRECTORS AND EXECUTIVES Chief Executives’ Remuneration:

THE GROUP SALARY BONUS OTHERS TOTAL COMPENSATION REMUNERATION $ $ $ $ 2020 Yang Ban Seng1 40,000 - - 40,000

Cheng Siak Kian2 288,650 188,250 61,291 538,191

Note: 1 Amount constitutes Mr Yang Ban Seng’s CEO’s remuneration for the period from 1 January 2020 to 29 February 2020. His CEO’s remuneration is paid to the Company’s holding company, ComfortDelGro Corporation Limited.

2. The remuneration of Mr Cheng Siak Kian for FY 2020 includes his remuneration as Chief Operating Officer (COO) for the period 1 January 2020 to 29 February 2020 and Acting CEO of the Company for the period from 1 March 2020 to 31 December 2020.

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The remuneration of the Non-Executive Directors comprised entirely Directors’ fees as follows:

DIRECTORS’ FEES 2020 $ Lim Jit Poh 84,731

Yang Ban Seng1 -

Lim Seh Chun 60,522

Chua Mui Hoong 51,444

John De Payva 44,383

Susan Kong Yim Pui 54,470

Lee Sok Koon 64.557

Lim Siang Hoe, Benny 51.444

Tan Kim Siew 51,444

Yu Ching Man 54,470

Notes: 1 Mr Yang Ban Seng was re-designated as Executive Deputy Chairman as of 15 January 2019 and stepped down as CEO as of 1 March 2020. No Directors Fees are paid to him in 2020.

The remuneration of the Key Management Personnel in the five (5) key portfolios having regard to the performance of the individuals and the Group, are as follows:

THE GROUP SALARY BONUS OTHERS TOTAL COMPENSATION REMUNERATION BAND % % % % 2020 $250,000 to $499,999

Leong Yim Sing 59.3 27.1 13.6 100

Goei Beng Guan, Alex 62.0 25.6 12.4 100

Tan Eng Kok, Ivan 59.0 27.0 14.0 100

Pang Fui Eng, Ivan 57.6 25.0 17.4 100

Yeo See Peng 65.5 25.6 8.9 100

The total remuneration paid to these five (5) Key Management Personnel holding the key portfolios (who are not Directors or the CEO/Acting CEO) amounted to $1,809,506.

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REMUNERATION OF CERTAIN RELATED EMPLOYEES The Group has put in place a Standard Operating During FY 2020, no employees whose remuneration Procedure (SOP) on compilation of information exceeded $100,000 was a substantial shareholder of on privy persons who have access to material the Company, or an immediate family member of a information of transactions that have yet to be Director or the CEO/Acting CEO. “Immediate family disclosed to the public. The SOP prescribes that the member” means the spouse, child, adopted child, person-in-charge of such transactions must remind step-child, brother, sister and parent. all privy persons to keep all material information strictly confidential. 3. ACCOUNTABILITY AND AUDIT PRINCIPLE 9: RISK MANAGEMENT AND INTERNAL CONTROLS The Board has overall accountability to the Shareholders of the Company and ensures The Board is responsible for the governance of risk that the Group is managed well and guided by and ensures that Management maintains a sound sustainable long-term strategic objectives. The system of risk management and internal controls, Board is responsible for providing a balanced to safeguard the interests of the Company and its and understandable assessment of the Group’s Shareholders. performance, position and prospects. Material price sensitive and trade sensitive information, Annual Risk management is an important and integral part Reports and other material corporate developments of SBS Transit’s strategic planning and decision- are disseminated in a timely and transparent manner making process. Key risks are identified and presented and posted on the Company’s website as well as to the ARC and Board annually. Ownership of the SGXNET. The Financial Results are reported semi- risk management process is clearly defined and annually via SGXNET with an accompanying Negative cascaded to the executive and functional level, with Assurance by the Board to confirm that nothing has stewardship retained at Senior Management. Plans come to its attention that may render the results false that are necessary to manage and mitigate the risks or misleading in any material aspects. The Company are in place and closely monitored. The adequacy of believes that prompt and full compliance with the risk governance, risk policy and internal controls statutory reporting requirements is fundamental to in place is also assessed as part of the process. A maintaining Shareholder confidence and trust. detailed description of the Group’s approach to internal controls and risk management can be found The Group has formalised a Policy on Securities from pages 108 to 111 of this Annual Report. – Restrictions Against Dealings to provide guidance to Directors and Executives of the As part of the risk management process, all Group in relation to dealings in the securities businesses are required to refresh their risk of the Company, ComfortDelGro Corporation inventories, conduct risk prioritisation exercises, Limited (ComfortDelGro) and VICOM Ltd (VICOM). identify key and emerging risks, and develop the Directors and Executives of the Group are prohibited requisite risk controls and risk treatment action plans. from dealing in the securities of the Company, The identified risks, their indicators and action plans ComfortDelGro and VICOM during the period are to be continually reviewed and reported. In 2020, commencing one month before the announcements the Group continued with its engagement of the of the Company’s, ComfortDelGro and VICOM’s external consultant to strengthen its risk management semi-annual results, and the full-year results and framework. ending on the date of the announcement of the relevant results. All Directors and Executives are The Internal and External Auditors conduct reviews in notified of the trading blackout periods before the accordance with their audit plans. Any material non- start of the financial year and are given reminders compliance and recommendations for improvements prior to each trading blackout period. on the internal controls are reported to the ARC. The ARC also reviews the effectiveness of the actions All Directors and Executives of the Group are also taken by Management on the recommendations told that they must not deal in (i) the securities made by the Internal and External Auditors. The of the Company, ComfortDelGro and VICOM recommendations are followed up as part of the on short-term consideration and/or while in Group’s continuous review of the system of internal possession of unpublished material price-sensitive controls. information relating to the relevant securities; and (ii) the securities of other listed companies while in For FY 2020, the Board has received assurance from possession of unpublished material price-sensitive the Acting CEO and Chief Financial Officer (CFO) information relating to those securities. Executives that (i) the financial records have been properly are required to notify the Company upon disposal of maintained and the financial statements are prepared shares arising from the exercise of options under the in compliance with the Singapore Financial Reporting Employees’ Share Option Scheme which expired on 8 Standards (International) and are correct in all June 2010.

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material aspects and give a true and fair view of the corporate communications and internal audit for operations and finances of the Group; and (ii) the more than 20 years. Ms Lee holds a Bachelor of Group’s internal controls system (including financial, Accountancy (Hons) from the then University of operational, compliance and information technology Singapore in 1975. She is a Member of the Institute controls) and risk management systems are adequate of Singapore Chartered Accountants and a and effective. member of the Institute of Directors in Singapore.

Key risks, mitigating controls and business continuity (ii) Ms Chua Mui Hoong is an Independent Non- plans in place are reviewed annually by the ARC and Executive Director of SBS Transit Ltd. She is also the Board. Based on these reviews, the Board is of a member of the Service Quality Committee of the view, with the concurrence of the ARC, that the the Company. She is a former board member of systems of risks management and internal controls the Agri-Food and Veterinary Authority, where she in place for the Group are adequate and effective to was a member of the Audit and Risk Committee. address its financial, operational, compliance and Ms Chua holds a Bachelor of Arts (Honours) in technology risks and to provide reasonable assurance English literature from Cambridge University and a against material financial misstatements or loss. Master in Public Administration from the Harvard Kennedy School. PRINCIPLE 10: AUDIT AND RISK COMMITTEE (iii) Professor Lim Seh Chun is the Lead Independent As at 31 December 2020, the ARC comprises five and Non-Executive Director of SBS Transit Ltd. (5) independent NEDs. None of the ARC members He is also the Chairman of the Nominating are previous partners or directors of the External Committee of the Company. Professor Lim is Auditors within the previous 24 months and none the Associate Provost for Student Affairs at the of the ARC members hold any financial interest in Singapore University of Technology and Design. the External Auditors. The Chairman and Members He holds a Bachelor of Arts (Hons) in Engineering of the ARC are rotated periodically. The Board has Science from Oxford University, Master of Arts reviewed and is satisfied that the members of the from Oxford University, Master of Engineering ARC are appropriately qualified to discharge their from National University of Singapore and Doctor responsibilities. of Philosophy from Cambridge University. He is a Fellow of the Institution of Engineers, Singapore, The ARC members who collectively bring with them the Institution of Mechanical Engineers, UK and recent and relevant managerial and professional the Institute of Materials, Minerals and Mining, expertise in accounting and related financial UK. He is a registered Professional Engineer management domains, are as follows: in Singapore and a Chartered Engineer in the UK. He was awarded the Public Administration (i) Ms Lee Sok Koon, Chairman of the ARC, is an Medal (Silver) in 2005 and the Long Service Independent Non-Executive Director of SBS Medal in 2006 by the President of the Republic Transit Ltd. She is also a member of both the of Singapore. Professor Lim was a Director of Service Quality Committee and the SBST Tender the Singapore Symphonia Company Limited Committee of the Company. She is also an until October 2017. He is presently Chairman, Independent Non-Executive Director of Japan Singapore School of Science and Technology Foods Holding Ltd, a public listed company Board of Directors. on the Singapore Exchange and an honorary member of the School’s Fundraising Committee (iv) Mr Lim Siang Hoe Benny is an Independent Non- of Singapore Arts School Ltd, Singapore’s first Executive Director of SBS Transit Ltd. He is also pre-tertiary specialised arts school. Ms Lee is a member of the Nominating Committee of the also an independent Director of NUS America Company. Mr Lim is the Chairman of Temasek Foundation, Inc., a tax exempt public charity in Foundation Connects CLG Limited as well as the the United States of America. Ms Lee was the Chairman of Temasek Foundation CLG Limited. Director of Operations in the Development Office He is also an Independent Director of Tridex Pte of the National University of Singapore from May Ltd. Mr Lim was awarded the Public Administration 2012 to August 2017. Prior to this appointment, Medal (Gold) in 2002 and the Meritorious Service Ms Lee was the Finance Director of Lum Chang Medal in 2010 by the President of the Republic Holdings Ltd and L.C. Development Ltd (now of Singapore. Mr Lim holds a Bachelor of Arts known as AF Global Limited), public companies (Hons) in English from the National University which are listed on the Singapore Exchange Ltd. of Singapore and a Master of Science with She was responsible for the finance and corporate Distinction in Political Sociology from the London affairs of the two listed companies covering all School of Economics and Political Science. financial matters, corporate governance, tax, legal,

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(v) Dr Tan Kim Siew is an Independent Non- (vi) Recommend the appointment, re-appointment or Executive Director of SBS Transit Ltd. He is also removal of the External Auditors at the AGM and a member of the Service Quality Committee review the fees due to them; of the Company. He is also an Independent Non-Executive Director of VICOM Ltd. Dr Tan is (vii) Review and approve the annual audit plans of the presently a Senior Consultant in the Ministry of External Auditors; Finance and Chairman of the Governing Board for the Mechanobiology Institute, National (viii) Review and approve the Internal Auditor’s annual University of Singapore. Dr Tan was awarded the and three-year rolling work plans; and Public Administration Medal (Silver) (Military) in 1990, the Public Administration Medal (Silver) in (ix) Review the effectiveness fo the Group’s Whistle 1996, the Public Administration Medal (Gold) in Blowing Policy. The Whistle Blowing Policy is 2001 and the Long Service Medal in 2003 by the described on page 111 of this Annual Report. President of the Republic of Singapore. Dr Tan holds a Bachelor of Arts (Honours) (Engineering AUDIT AND RISK COMMITTEE’S ACTIVITIES Tripos) with Distinction in Electronics Engineering The ARC scheduled four (4) meetings during the and Doctor of Philosophy (Engineering) from the financial year under review but due to COVID-19 only University of Cambridge. three (3) meetings took place. The Executive Deputy Chairman, Acting CEO, CFO, ComfortDelGro Group The details of the ARC members’ credentials are Chief Internal Audit Officer (GCIAO) and the External found in pages 55 to 58 of this Annual Report. Auditors were present at these meetings. The ARC reviewed and considered the following: Members of the ARC keep abreast of relevant changes to accounting standards and issues through (i) Overall scope of both internal and external audits attendance at relevant seminars/talks, articles and and results of their respective audits; news circulated by the Company Secretaries and regular updates by the External Auditors at ARC (ii) Significant internal and external audit observations Meetings. and Management’s responses;

The terms of reference of the ARC are aligned with (iii) Half yearly and full year results announcements the provisions of Section 201B(5) of the Companies and the financial statements and recommendation Act, Cap. 50 and include the following: to the Board;

(i) Risk identification and eviewingr the adequacy and (iv) Adoption of the Singapore Financial Reporting effectiveness of financial, operational, compliance Standards (International); and information technology controls and risk management systems to ensure effectiveness in (v) Interested Person Transactions; the management of risks and compliance with internal policies and external regulations; (vi) Corporate Service Charges;

(ii) Review the effectiveness, adequacy and (vii) Risk Management and adequacy and effectiveness independence of the Group’s external audit and of internal controls; internal audit function; (viii) Independence of the External Auditors; (iii) Review the semi-annual and annual financial statements and also significant accounting and (ix) Re-appointment of External Auditors and its reporting issues and their impact on financial remuneration and recommendation to the Board; statements so as to ensure the integrity of and the financial statements and any formal announcements relating to the Group’s financial (x) Significant matters (if any) raised through the performance and recommend to the Board the whistle-blowing channel. acceptance of such financial statements; In the performance of its duties, the ARC has (iv) Review the scope and results of the audits explicit authority to investigate the affairs falling undertaken by the Internal and External Auditors, within its terms of reference, with full access to including non-audit services performed by the and cooperation from Management, discretion to External Auditors to ensure that there is a balance invite any Director or executive officer to attend its between maintenance of objectivity and cost meetings and reasonable resources to enable it to effectiveness; discharge its duties properly.

(v) Review Interested Person Transactions;

PG 98 ANNUAL REPORT 2020

The ARC meets with the Internal and External SIGNIFICANT FINANCIAL REPORTING MATTERS Auditors annually in the absence of Management. In the review of the financial statements of the Group, During these meetings, the Auditors may raise issues the ARC considered the following key audit matters: encountered in the course of their work directly to the ARC.

SIGNIFICANT MATTERS REVIEW OF SIGNIFICANT MATTERS BY THE ARC Valuation and completeness of The ARC considered the approach and methodology applied to the provision for accident claims valuation and completeness of provision for settlement of accident claims. Following the review and discussions with Management and the External Auditors, the ARC is satisfied with the estimates used in determining the probability and amounts of expected settlement claims.

Provision for Rail contract The ARC considered the approach and methodology applied to assess that no provision for rail contract is required. Following the review and discussions with Management and the External Auditors, the ARC is satisfied with the significant judgement used in determining that no provision is required.

Following the review and discussions on the above, Managing Director/Group CEO of ComfortDelGro the ARC recommended to the Board to approve the Corporation Ltd. financial statements of the Group for the financial year ended 31 December 2020. The ComfortDelGro Group Internal Audit Division adopts a risk-based approach in its continuous REVIEW OF INDEPENDENCE OF EXTERNAL AUDITORS audit work with focus on material internal control Prior to the re-appointment of the External Auditors, systems including financial, operational, information the ARC assesses their independence based on the technology and compliance controls. It provides guidelines set by the Accounting and Corporate an independent and objective evaluation of the Regulatory Authority and the Accountants Act. internal control systems and Corporate Governance Having satisfied itself that the independence of processes of the Group. The annual and three year the External Auditors, Deloitte & Touche LLP, is not rolling audit plans are developed by the GCIAO in impaired by their provision of non-audit services to consultation with, but independent of, Management the Group and that Rules 712, 715 and 716 of the and are subject to the ARC’s approval before the SGX-ST Listing Manual have been complied with, the start of each financial year. Quarterly internal audit ARC has recommended to the Board that Deloitte & reports are also prepared and submitted to the ARC. Touche LLP be nominated for reappointment as the Any material non-compliance or lapses in internal Company’s External Auditors at the next AGM. controls are reported to the ARC and the CEO/ Acting CEO for improvements to be made. The ARC As a further safeguard of Deloitte & Touche LLP’s conducts review of the adequacy, effectiveness, independence, the partner in-charge of auditing the independence, scope and results of the internal audit Company is changed every five years. function. The ARC has full access to the GCIAO, and meets with the GCIAO at least once a year in the INTERNAL AUDIT absence of Management. The Group Internal Audit The internal audit function of the Group is performed Division is given unfettered access to all the Group’s by ComfortDelGro’s group internal audit division documents, records, properties and personnel, comprising of suitably qualified and experienced including access to the ARC and has appropriate Internal Audit staff including the Group Chief Internal standing within the Group. Audit Officer (GCIAO). The ComfortDelGro Group Internal Audit staff have professional qualifications The activities and organisational structure of the and are either members of the Institute of Singapore ComfortDelGro Group Internal Audit Division are Chartered Accountants, the Information Systems monitored and reviewed by the ARC periodically Audit and the Control Association or Institute of to ensure that it has the necessary resources to Internal Auditors. The GCIAO reports functionally to adequately perform its functions and that there are the Chairman of the ARC and administratively to the no unjustified restrictions and limitations placed on Managing Director/Group CEO of ComfortDelGro the performance of its duties. The ComfortDelGro Corporation Ltd. The ComfortDelGro Group ARC Group Internal Audit Division has adopted the participates in the hiring, removal and evaluation of International Standards for the Professional Practice the GCIAO and reviews his compensation with the of Internal Auditing laid down in the International

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Professional Practices Framework issued by the CONDUCT OF SHAREHOLDER MEETING Institute of Internal Auditors (IIA Standards). The The Company encourages and supports shareholder ComfortDelGro Group Internal Audit Division participation at general meetings, and views the AGM successfully completed its external Quality Assurance as a good opportunity for Shareholders to meet the Review in 2018 by PricewaterhouseCoopers LLP and Board and Senior Management. The top criterion for continues to meet or exceed the IIA Standards in all selecting the AGM venue is an easy to reach location key aspects. The next Quality Assurance Review is within Singapore accessible by public transport. scheduled for 2023. Shareholders are informed of Shareholders’ Meetings through notices published in the newspapers and The ARC finds the ComfortDelGro Group Internal circulars sent to all Shareholders. All registered Audit Division independent, effective and adequately Shareholders are invited to attend and participate resourced. actively in the AGM and are given the opportunity to seek clarification or question the Group’s strategic 4. SHAREHOLDER RIGHTS AND ENGAGEMENT direction, business, operations, performance and proposed Resolutions. PRINCIPLE 11: SHAREHOLDER RIGHTS AND CONDUCT OF GENERAL MEETINGS All Directors including the Chairman, CEO/Acting CEO and the Chairpersons of the various Board DISCLOSURE OF INFORMATION TO SHAREHOLDERS Committees together with Senior Management and The Company notifies Shareholders in advance the Company Secretaries are present to address any of the dates of release of its Financial Results question or feedback raised by the Shareholders at through the Company’s website as well as SGXNET. the AGM and thereafter, including those pertaining Communications with Shareholders is conducted to the proposed Resolutions before they are voted through announcements to the SGXNET, media on. The External Auditors are also present to address and analyst briefings after the announcement of Shareholders’ queries about the conduct of audit and the Financial Results together with its presentation the preparation and contents of the Auditor’s Report. materials, as well as the posting of announcements and press releases on the Company’s website. The Constitution of the Company provides for The Group has formalised a Policy on Securities voting in-person and by proxy at the AGM of the – Drafting and Releasing SGX Announcements Company. Each Shareholder is allowed to appoint up to provide guidance on preparation of SGX to two proxies to vote on his behalf at Shareholders’ announcements. Meetings through proxy forms sent in advance. Relevant intermediaries such as the Central Provident Shareholders may send in their requests or queries Fund and custodian banks are entitled to appoint through the feedback channel provided on the more than two proxies to attend, speak and vote website. The ComfortDelGro Group’s Investor at Shareholders’ Meetings. Shareholders who hold Relations (IR) team is accessible throughout the year shares through these relevant intermediaries will to address Shareholders’ queries. The contact details be allowed to attend, speak and vote at the AGM of the ComfortDelGro Group Chief Investor Relations subject to being appointed a proxy by their respective Officer (GCIRO) can be found on the website. relevant intermediaries.

Beyond complying with the requirements of the Each issue or matter requiring Shareholders’ approval Code, the SGX-ST Listing Manual and the Companies is tabled as a separate and distinct Resolution. All Act, Cap. 50, the Company has also taken various the Resolutions at the Shareholders’ Meetings are additional measures to enhance Corporate single item Resolutions. The Company will consider Governance and improve transparency, including: implementing absentia voting methods such as voting via mail, e-mail or fax when security, integrity (i) The Notice of AGM is released publicly at least 28 and other pertinent issues are satisfactorily resolved. days before the AGM is held; and The Company prepares Minutes of General Meetings (ii) The Annual Report is available to all Shareholders that include substantial and relevant comments or at the Company’s website at least 28 days before queries from Shareholders relating to the agenda the AGM to ensure that all Shareholders have of the meeting and responses from the Board adequate time to review the Annual Report and Management. The Minutes are available to before the AGM. The electronic documentation Shareholders on the Company’s website and SGXNET demonstrates the Group’s commitment towards within one month after the date of the AGM. Green and sustainable efforts. Upon request, hard copies are provided to Shareholders.

PG 100 ANNUAL REPORT 2020

The Company has adopted electronic poll voting share for the FY 2020 at the forthcoming AGM of the for General Meetings since 2013 to ensure greater Company. transparency and efficiency in the voting process and results. Shareholders are invited to vote on PRINCIPLE 12: ENGAGEMENT WITH SHAREHOLDERS each of the Resolutions by poll, using an electronic voting system. The results of all votes cast for or REGULAR, EFFECTIVE AND FAIR COMMUNICATIONS WITH against each Resolution or abstentions if any and SHAREHOLDERS the respective percentages (Voting Results) and the It is our policy to disseminate accurate and pertinent names of the independent scrutineers for the AGM information to the market in a timely and transparent are presented during the AGM and are announced manner as part of good Corporate Governance. via the SGXNET after the AGM. Voting by poll is the We have put in place an IR programme to promote most accurate means of tabulating Shareholders’ regular, effective and fair communications with votes according to the number of shares owned. We Shareholders and the investment community. The believe that this will encourage greater Shareholders’ dedicated ComfortDelGro IR team works with participation at the Company’s General Meetings Senior Management to proactively carry out this and demonstrates SBS Transit’s commitment to engagement programme. high standards of Corporate Governance and transparency. Communications with the SGX-ST is handled by the Company Secretaries, while communications The Company’s AGM for the Financial Year ended with Shareholders, analysts and fund managers is 2019 was held by way of audio-visual electronic handled by the GCIRO. Specific guidelines have been means as a result of the COVID-19 Circuit Breaker laid down for compliance in respect of all public measures. On 23 September 2020, the Ministry communications. The Company does not practise of Health declared that companies could resume selective disclosure in the communication of material physical general meetings, for up to 50 persons at information. permitted premises with strict adherence to safe management measures. As such, the Board decided In addition, the Company has put in place operational that the FY 2020 AGM will be held both physically and procedures to respond promptly to queries from by way of audio-visual electronic means. To minimise the SGX-ST on any unusual trading activities in its physical interaction and COVID-19 transmission securities and to clear all announcements to the risk, the number of shareholders allowed to attend SGXNET with the Board. the AGM in-person will be below 50, based on the prevailing national guidelines and regulations. 5. MANAGING STAKEHOLDERS RELATIONSHIPS Shareholders who are not able to attend the AGM in-person or those who prefer to attend the live PRINCIPLE 13: ENGAGEMENT WITH STAKEHOLDERS webcast may do so by audio or audio-visual means. Shareholders are required to appoint the Chairman of The Company recognises the importance of the AGM as proxy to vote on their behalf at the AGM. engaging and balancing the needs and interests Please refer to the notice of the FY 2020 AGM for of material stakeholders as part of its overall more information. responsibility to ensure that the best interests of the Company are served. DIVIDEND POLICY The Company’s dividend policy is to pay out at least The Company has arrangements in place to enable 50% of profit attributable to Shareholders of the it to engage stakeholders so as to better understand Company. The dividend policy takes into account the and take action to address their needs and interests. long-term objective of maximising shareholder value, The basis for and methods of engagement with the availability of cash and retained earnings, projected stakeholders, along with the key areas of focus for Capital Expenditure and growth opportunities. The each stakeholder group, can be found on pages 74 Company declares dividend semi-annually and to 83 of the Sustainability Report. Our Sustainability informs its Shareholders of the dividend payments via Report highlights the economic, environmental and announcements in the SGXNET. Dividends are paid to social aspects of our developments and operations Shareholders in an equitable and timely manner. in accordance with the Global Reporting Initiative Guidelines (G4 Core) and is issued ahead of the No interim dividend was declared for 1H FY 2020 requirement under the SGX-ST Listing Manual. in order to conserve cash during COVID-19 uncertainties. However, the Board has proposed a The Company maintains a current corporate website tax-exempt final dividend of 6.30 cents per ordinary to communicate and engage with stakeholders.

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ADDITIONAL MEASURES TO ENHANCE CORPORATE HEALTH AND SAFETY POLICY GOVERNANCE Given the nature of the Group’s businesses, the health and safety of the employees and customers are of The Company has also undertaken various additional paramount importance. We comply with statutory measures to enhance Corporate Governance as requirements and regulations and procedures are follows: put in place to guide proper safe work practices for the well-being of all employees and customers. CORPORATE GIFTS/ENTERTAINMENT POLICY Employees are sent for training to equip them with Whilst business gifts and entertainment are courtesies the required competencies. that build goodwill and sound working relationships among Business Partners, the Group does not Employees are to observe safety rules and carry out tolerate the improper use of gifts or entertainment to safe work practices that apply to their jobs to ensure gain any special advantage in a business relationship. a safe work environment for everyone.

The Group discourages the receipt of gifts or INFORMATION PROTECTION POLICY acceptance of entertainment, loans or other favours The Group has also implemented an Information as these may compromise an employee’s ability Protection Policy to ensure that all documents to make objective, independent and fair business and data information of the Group are properly decisions. Offering excessive gifts in whatever form safeguarded. or entertainment to others can also be opened to misinterpretation. Information is classified into secret, confidential, restricted and unrestricted use based on its nature, Employees are therefore not permitted to offer or contents and implications. Processes and systems accept any gifts or entertainment without first seeking used to store, process or communicate the their supervisor’s authorisation. Employees who information provide protection from unauthorised receive gifts directly or indirectly in relation to their disclosure and use. employment with the Group are expected to notify their supervisors and declare such gifts to the Group DATA PROTECTION POLICY Human Resource Department. All gifts declared are The Group has implemented data protection processed through structured corporate procedures policies and practices to ensure compliance with the to ensure proper accountability. obligations under the Personal Data Protection Act and Do Not Call provisions that came into force in Business gifts presented and entertainment on 2014. the Group’s behalf are consistent with generally Corporate Governance accepted business practices CYBER SECURITY POLICY and ethical standards and do not violate any The Group has adopted the international information applicable laws, regulations or policies of any country Security Standard ISO 27000 in assessing and we operate in or company in which we have dealings formulating the Company’s cyber security framework. with. The Group regularly reviews its cyber security measures to ensure effective protection of our ANTI-CORRUPTION POLICY information technology systems and databases. We The Group complies with all the laws of the have implemented multi-layered defence, including jurisdictions in which it operates and conducts firewalls, intrusion prevention system, network businesses in an open, transparent manner, and access control, server hardening, data encryption prohibits employees from directly or indirectly and employee security training. We keep abreast offering, promising to pay, or authorising the payment of the evolving threats and the latest techniques, of money or anything of value for the purpose of and actively collaborate with cyber security gaining perceived personal advantage for the Group. authorities and regulators to develop appropriate All employees are responsible for following the countermeasures. Group’s procedures, including audit controls, for carrying out and reporting business transactions. We will continue to strengthen our capabilities in light of the way cyber security risks will evolve BLOCK LEAVE POLICY with the digital age. As and when necessary, we As a further risk mitigation measure and to enhance will take appropriate risk management decisions governance, the Group has a Block Leave Policy and implement security controls to secure our in place which applies to Employees holding key information infrastructure systems and databases. functions. This arrangement allows covering officers to fully step into the duties of the Employees on leave as an additional check and balance against any breaches.

PG 102 ANNUAL REPORT 2020

SUPPLIER ETHICS POLICY The Group procures a wide range of goods and services from various businesses, companies, persons and entities and requires its suppliers to be in full compliance with all applicable laws and regulations and practice fair competition in accordance with local anti-trust and competition regulations. Suppliers must conduct their businesses with integrity, transparency and honesty and the Group does not condone any corrupt and fraudulent practice.

Suppliers must have in place health and safety policies for its employees and be committed to good environmental, social and governance practices. Suppliers must not trade in the securities of the Group while in possession of confidential non-public information.

CREDITORS’ PAYMENT POLICY The Group values its suppliers and is committed to safeguarding creditors’ rights and acknowledges the importance of paying invoices, especially those of small businesses, in a timely manner. It is the Group’s practice to agree terms with suppliers when entering into contracts. We negotiate with suppliers on an individual basis and meet our obligations accordingly.

INTERESTED PERSON TRANSACTIONS

LISTING MANUAL – RULE 907 Aggregate value of all interested person transactions during Aggregate value of the financial year all interested person under review (excluding transactions conducted transactions less than under shareholders’ $100,000 and transactions mandate pursuant to Name of conducted under Rule 920 (excluding Interested Nature of shareholders’ mandate transactions less than Person Relationship pursuant to Rule 920) $100,000) ComfortDelGro ComfortDelGro 11,128,000 Nil is the majority shareholder of the Company

VICOM Ltd VICOM is an 1,532,000 Nil associate of the Company

The aggregate value of the above transactions does not include the aggregate value of $2.9 million from the renewal of Licence Agreement disclosed in the Introductory Document of the Company dated 3 December 1997. These transactions relate to leasing charges paid to ComfortDelGro for use of the premises. There is no Shareholders’ mandate for Interested Person Transactions pursuant to Rule 920 of the Listing Manual.

PG 103 SBS TRANSIT LTD DIRECTORS’ PARTICULARS

PAST DIRECTORSHIPS / CHAIRMANSHIPS HELD OVER THE PRECEDING FIVE PAST PRINCIPAL YEARS (FROM 1 COMMITMENTS PRESENT DIRECTORSHIPS / JANUARY 2016 OVER THE CHAIRMANSHIPS TO 31 DECEMBER PRESENT PRINCIPAL PRECEDING FIVE NAME AGE (AS AT 31 DECEMBER 2020) 2020) COMMITMENTS YEARS LIM JIT POH 81 Principal Directorships in • Ascott Nil Nil Chairman the ComfortDelGro Group Residence (Non- • ComfortDelGro Trust Corporation Limited* Management Independent • Beijing Jin Jian Taxi Ltd* Non-Executive Services Co., Ltd Director) • Comfort Transportation Pte Ltd • CityCab Pte Ltd • ComfortDelGro Engineering Pte Ltd • CityFleet Networks Limited • ComfortDelGro Corporation Australia Pty Ltd • Guangzhou Xin Tian Wei Transportation Development Co., Ltd • Metroline Limited • Swan Taxis Pty Ltd

Principal Directorships in the VICOM Group • VICOM Ltd* • Setsco Services Pte Ltd

Other Companies • Family Leisure Pte Ltd • NCI Golf Pte Ltd • Pasir Ris Resort Pte Ltd • Orchid Leisure Enterprises (Pte) Ltd • Surbana Property Investment Pte Ltd • CapitaLand Township Development Fund Pte Ltd • CapitaLand Township Development Fund II Pte Ltd

* Listed Company

PG 104 ANNUAL REPORT 2020

PAST DIRECTORSHIPS / CHAIRMANSHIPS HELD OVER THE PRECEDING FIVE PAST PRINCIPAL YEARS (FROM 1 COMMITMENTS PRESENT DIRECTORSHIPS / JANUARY 2016 OVER THE CHAIRMANSHIPS TO 31 DECEMBER PRESENT PRINCIPAL PRECEDING FIVE NAME AGE (AS AT 31 DECEMBER 2020) 2020) COMMITMENTS YEARS YANG BAN SENG 64 Directorship in the Nil • ComfortDelGro • SBS Transit Deputy SBS Transit Group Corporation Limited* Ltd* (Executive Chairman • SBS Transit DTL Pte Ltd (Managing Director Deputy & Group Chief Chairman) (Non- Principal Directorships in Executive Officer) Independent the Non-Executive ComfortDelGro Group Director from • ComfortDelGro 1 March 2021) Corporation Limited* • Beijing Jin Jian Taxi (Non- Services Co., Ltd Independent • Comfort Transportation Pte Ltd Executive • CityCab Pte Ltd Director from • ComfortDelGro 15 January 2019 Engineering Pte Ltd - 28 February • CityFleet Networks 2021) Limited • ComfortDelGro Corporation Australia Pty Ltd • Guangzhou Xin Tian Wei Transportation Development Co., Ltd • Metroline Limited • Swan Taxis Pty Ltd

Principal Directorships in the VICOM Group • VICOM Ltd* • Setsco Services Pte Ltd • JIC Inspection Services Pte Ltd

LIM SEH CHUN 66 Nil Singapore • Singapore University (Lead Symphony of Technology and Independent Group Design (SUTD) (Associate Provost for Non-Executive Student Affairs) Director) • Singapore School of Science and Technology (Chairman) CHUA MUI 52 Nil • Straits Times • Singapore Press Nil HOONG Press Pte Ltd Holdings Ltd* (Independent • Agri-Food (Opinion Editor of the and Veterinary Straits Times) Non-Executive Authority Director)

* Listed Company

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DIRECTORS’ PARTICULARS

PAST DIRECTORSHIPS / CHAIRMANSHIPS HELD OVER THE PRECEDING FIVE PAST PRINCIPAL YEARS (FROM 1 COMMITMENTS PRESENT DIRECTORSHIPS / JANUARY 2016 OVER THE CHAIRMANSHIPS TO 31 DECEMBER PRESENT PRINCIPAL PRECEDING FIVE NAME AGE (AS AT 31 DECEMBER 2020) 2020) COMMITMENTS YEARS JOHN DE PAYVA 71 Other Company Nil • National Trades • Pasir Ris (Independent • Orchid Leisure Union Congress Resort Pte Ltd Non-Executive Enterprises (Pte) Ltd (NTUC) (President (Director) Emeritus & Trustee) • ITUC – Asia Director) • Singapore Manual Pacific (Vice- and Mercantile President) Workers’ Union • International (Executive Director Trade Union and Secretary – Confederation General Emeritus) (ITUC) General • UNI – Professional Council (Vice and Managerial (Asia President, Pacific Regional Brussels Officer – Chairman) Office) • Union Network • ITUC – Asia International (UNI) Pacific (Board Member, (Executive Nyon, Switzerland) Bureau – • DBS - Staff Union Chairman) (Trustee) • Ong Teng • National Transport Cheong Workers’ Union Institute of (Trustee) Labour Studies • NTUC International (Member Relations (Advisor) of Board of • Education Services Governors) Union (Advisor)

SUSAN KONG 60 Other Companies Nil • Q.E.D. Law Nil YIM PUI • HealthServe Limited Corporation (Partner) (Independent • Singapore Tyler Print Non-Executive Institute Director) • Q.E.D. Law Corporation LEE SOK KOON 67 Other Companies • Invictus Group Nil • National (Independent • Japan Foods Holding Pte Ltd University of Non-Executive Ltd* • Singapore Arts Singapore School Ltd (Director of Director) • NUS America Foundation, Inc. Operations in the Development Office)

* Listed Company

PG 106 ANNUAL REPORT 2020

PAST DIRECTORSHIPS / CHAIRMANSHIPS HELD OVER THE PRECEDING FIVE PAST PRINCIPAL YEARS (FROM 1 COMMITMENTS PRESENT DIRECTORSHIPS / JANUARY 2016 OVER THE CHAIRMANSHIPS TO 31 DECEMBER PRESENT PRINCIPAL PRECEDING FIVE NAME AGE (AS AT 31 DECEMBER 2020) 2020) COMMITMENTS YEARS LIM SIANG HOE, 64 Other Companies • Rysense Ltd • National Parks Board • Permanent BENNY • Temasek Foundation • Raffles Health (Chairman) Secretary (Independent Connects CLG Limited Insurance Pte • National Library of Prime Ltd Board (Member of Minister’s Non-Executive • Tridex Ptd Ltd • Temasek Foundation CLG the National Records Office Director) Limited Advisory Committee) • Permanent • TF IPC Ltd* • Ministry of National Secretary Development (Special of National Advisor to the Centre Security and for Liveable Cities) Intelligence • Nanyang Technology Coordination University (Special • Permanent Advisor for the Secretary National Security of Ministry Studies Programme of National of the S. Rajaratnam Development School of International Studies) TAN KIM SIEW 67 Directorship in the Nil Nil Nil (Independent VICOM Group Non-Executive • VICOM Ltd* Director) YU CHING MAN 55 Nil Nil • Hong Kong • Singapore (Independent Polytechnic Institute of Non-Executive University (Professor, Technology Interdisciplinary Director) (Professor and Division in Programme Aeronautical and Director in Aviation Engineering) Sustainable Infrastructure Engineering (Land Transport) and Sustainable Infrastructure Engineering (Building Services))

* Listed Company

PG 107 SBS TRANSIT LTD RISK MANAGEMENT

SBS Transit’s Risk Management Framework provides a systematic process for the Businesses to identify and review the nature and complexity of the risks involved in their business operations and to prioritise resources to manage them. The Company is committed to enhancing shareholder value through growth that is sustainable and profitable, while taking measured and well-considered risks.

The Company’s approach to risk The key efforts of 2020 were thus management is underpinned by several focussed in ensuring a safe workplace key principles: for our people, and a safe commute for our customers. As an essential public • The risk management process is a transport operator, the Company had to continuous and iterative one, as the continue operations even at the peak of Company’s businesses and operating the pandemic, but with safe management environments are dynamic. Risk measures enforced. Amidst the disruption identification, assessment and risk resulting from the COVID-19 pandemic, management practices are reviewed the Company also refreshed our risk and updated regularly to manage risks management policies and processes, and proactively. reviewed the risk registers. This enables us to assess and better manage our business • We promote and inculcate risk and operational risks, and explore awareness among all our employees opportunities in the uncertain and volatile by embedding risk management environment. processes into day-to-day business operations and setting an appropriate The SBS Transit Risk Steering Committee tone at the top. Regular exercises, (RSC) at the Company level works closely continuous education and training, with all Businesses to ensure that risk as well as communications through management is taken seriously, and various forums on risk management that the Risk Management Framework are carried out to sustain a risk- is diligently implemented across the informed and risk-aware culture in the Company. The Chief Executive Officer Company. chairs the RSC, and members are drawn from major Businesses /Departments • Ownership of and accountability Heads. Key risks for the Company are for the risk management process is identified and presented to the Audit and clearly defined and assigned to the Risk Committee and the Board annually. risk owners. Managers at each level The key risks faced by the Company, the have intimate knowledge of their relevant mitigating factors and how they businesses and take ownership of are managed are set out in the paragraphs risk management, with stewardship below. retained at Senior Management. FINANCIAL RISKS In 2020, the COVID-19 pandemic has The Company has established internal upended economies, businesses and control systems to safeguard its assets livelihoods. For the public transport and regularly reviews the effectiveness industry, safe commute has emerged of these controls to improve and fortify as the top priority as the Government financial discipline. All policies and sought to contain the spread of infection, procedures on financial matters, including and assure the health and safety of approval limits and authority, are clearly commuters and staff. defined in the Company’s Financial Procedures Manual.

PG 108 ANNUAL REPORT 2020

FINANCIAL AUTHORITY LIMITS OPERATIONAL RISKS Comprehensive and specific financial Operational risks may arise from failures authority limits are put in place for capital in internal controls, operational processes expenditure, operating expenses, treasury or the supporting systems. The Company matters, bus/rail tenders, and disposal and has put in place operating manuals, write-off of assets. These authority limits standard operating procedures, authority are delegated based on the organisational guidelines and a rigorous reporting hierarchy from the Board down to the framework to manage these risks. Chief Executive Officer and the Heads of Business/Departments, with the SAFETY AND SECURITY Board retaining the ultimate authority. Managing the safety and security of our Any expenditure exceeding the highest customers, tenants, staff and the public authority limit is referred to the Board for is the cornerstone of the Company’s approval. To ensure that the Company’s safety and security policy. We run safety assets continue to be managed prudently, and awareness and training programmes the Board periodically reviews the to instil a safety and security conscious mandate that it delegates to Management. culture in our employees at all levels. Safety and security audits are conducted BUDGETARY CONTROL regularly to ensure that standards are A robust and comprehensive Annual maintained. The Company works closely Budget is prepared and approved by with the relevant Authorities to ensure that the Board prior to the commencement the security of our bus and train services of each financial year. Material and facilities are not compromised. Drills variations between actual and budgeted and exercises are conducted regularly, performance are reviewed on a monthly both internally and jointly with external basis. The capital expenditure budget agencies. Besides patrolling guards, fence is approved in-principle by the Board intrusion detection systems and other as part of the Annual Budget. Each security features are installed at all our capital expenditure is subjected to operating facilities. Members of the public, rigorous justification and review before staff and tenants are encouraged to look it is incurred in accordance with the out for suspicious objects or persons. Company’s financial authority limits. Specific approvals must be sought for ENVIRONMENTAL unbudgeted expenditures. Tight control The Company is committed to being a on manpower is exercised through the socially responsible organisation through headcount budget. minimising the impact our business activities have on the environment. ECONOMIC CYCLE Our operations, accidents and natural Changes in economic conditions events can result in pollution or other may impact the businesses in terms environmental risks. To limit these risks, of customer demand and the cost of we engage in active environmental risk providing the services. We manage these management, ensuring that we target risks by continuously scanning and problems that could arise and preventive monitoring political and economic issues. measures are put in place. We comply We also monitor demand trends, cost with all relevant regulations. Ways in structures and operating margins closely. which the Company works to protect Expenses are managed in the light of the environment can be found in our revenue patterns and changing market Sustainability Report. conditions. Where possible, revenue risks are mitigated by diversifying revenue MANPOWER streams to non-fare sources. A detailed The Company’s ability to develop and description of the financial risks and how grow the business depends on the quality the Company manages them are set out of its employees, and we are committed in the Notes to the Financial Statements to invest in building our resource pool. on pages 129 to 172. We have in place various programmes and processes that focus on several key areas, including talent management, building management bench strength, succession

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RISK MANAGEMENT

planning, performance management, INFORMATION TECHNOLOGY RISKS compensation and benefits, training and Information technology system failures development and employee conduct and cyber risks are key risks for the and supervision. We ensure that our Company since almost all the businesses employees are selected and promoted rely heavily on information technology. based on merit, they understand their In particular, our Rail Business has responsibilities and are given access to been designated as Critical Information necessary training. At all times, a positive, Infrastructure (CII) and Operations constructive and productive working Technology. Thus, cybersecurity is of climate based on strong tripartite relations critical importance here. This can take is fostered. We ensure that all policies, the form of major system failures which processes, terms and conditions of can result in disruption of the business employment, including those relating or a security breach of our information to the foreign labour force, are in technology systems. Cybersecurity is compliance with the relevant regulations. about protecting information systems and data from unauthorised access, use, PROPERTY AND LIABILITY disclosure, disruption, modification or The Company’s exposure to property destruction. The Company’s information damage, business interruption and other technology security management liability risks is constantly monitored framework complies with the latest and reviewed with the Company’s in- industry standards. We have put in place house insurance broking subsidiary. various controls and data recovery Together with external risk management measures to mitigate the risks, including consultants, we ensure the sufficiency the use of intrusion prevention systems, of insurance coverage and maintain multi-level firewalls, server protection, an optimal balance between risks that software code hardening and data loss are retained internally and risks that are prevention controls to manage Internet placed out with underwriters. security and Cyber threats. Penetration tests are carried out regularly to test the BUSINESS CONTINUITY systems, identify potential vulnerabilities We have put in place Business Continuity and to strengthen the security hardening Plans (BCPs) to mitigate the risks of of our websites. Information security disruption and catastrophic loss to our policies and procedures, including operations, people, information databases education for all staff, are reviewed and and other assets. Such risks can arise enhanced regularly. from adverse natural events like flooding, or from pandemic outbreaks. The BCPs COMPLIANCE RISKS include identification and planning of The Company keeps abreast and alternate recovery centres, operational complies with all laws and regulations procedures to maintain communication, governing the conduct of business in measures to ensure continuity of critical Singapore. These regulations include business functions, protection of our pricing, service standards, licences to employees and customers, and recovery operate and transport policies, which of information databases. We update are stipulated by the relevant regulatory and test the BCPs regularly. Drills and Authorities. We work closely with the emergency response exercises are Land Transport Authority, as part of our conducted to familiarise employees risk management process to keep abreast with the various incident management of developments and policies that may plans. The BCPs enhance the Company’s affect our businesses and the competitive operational readiness and resilience to landscape. We manage our operations potential business disruptions. effectively to ensure that standards are met, thereby reducing significantly the risk of penalty.

PG 110 ANNUAL REPORT 2020

STRATEGIC RISKS The Whistle Blowing Policy is to provide We continually review our business a mechanism for employees to raise strategy to ensure that we remain a concerns, through well-defined and relevant and significant player in the accessible confidential disclosure public transport market by participating channels about possible improprieties in competitive public transportation in financial reporting or other improper tenders. SBS Transit’s strategic risks business conduct. Employees are given include (1) competition - how we can/ a Company Handbook detailing how must defend and/or win public transport they can go about raising their concerns. tenders, and (2) changes in government Incidents can also be reported via a direct policies - how we build resilience by pro- Intranet link to the Chairperson of the actively engaging the authorities to realise Audit and Risk Committee and/or the objectives articulated in the land transport ComfortDelGro Group Chief Internal masterplan. Audit Officer. All cases are investigated and dealt with promptly and thoroughly. AUDIT PROCESS The number of whistleblowing cases The Internal and External Auditors regardless of significance will be conduct reviews in accordance with registered by Group Chief Internal Audit their audit plans to assess the adequacy Officer, and will be reported to the Audit of the internal controls that are in place. and Risk Committee quarterly. In the course of their audits, the Internal and External Auditors will highlight to the Management and the Audit and Risk Committee the areas where there are material deficiencies, non-compliance weaknesses or where there are occurrences or potential occurrence of significant risk events. The auditors will also propose mitigating measures and treatment plans. The recommendations are followed up as part of the Company’s continuous review of its system of internal controls, and the implementation status is reported to the Audit and Risk Committee.

CODE OF BUSINESS CONDUCT AND WHISTLE BLOWING POLICY The Company has adopted a Code of Business Conduct which sets out the principles and policies upon which businesses are conducted. The Code of Business Conduct includes the anti- corruption and anti-bribery policies that stress on zero tolerance on fraud, improper use of monetary favours, gifts or entertainment. In addition, employees should not put themselves in a position of conflict of interest with the Company. If there is a potential conflict of interest, employees should declare to their immediate supervisors and recuse themselves from the decision-making process.

PG 111 SBS TRANSIT LTD FINANCIAL CALENDAR

2019 Announcement of 2018 Full Year Results 12 February 2019

Annual General Meeting 25 April 2019

Announcement of 1st Quarter 2019 Results 13 May 2019

Payment of 2018 Final Dividend (7.1 cents/share) 13 May 2019

Announcement of 2nd Quarter 2019 Results 8 August 2019

Payment of 2019 Interim Dividend (7.15 cents/share) 27 August 2019

Announcement of 3rd Quarter 2019 Results 12 November 2019

2020 Announcement of 2019 Full Year Results 13 February 2020

Annual General Meeting 21 May 2020

Payment of 2019 Final Dividend (5.90 cents/share) 8 June 2020

Announcement of 2020 Half Year Results 13 August 2020

2021 Announcement of 2020 Full Year Results 9 February 2021

Annual General Meeting 29 April 2021

Payment of 2020 Final Dividend (6.30 cents/share) 19 May 2021 (Subject to Shareholders’ approval at the forthcoming Annual General Meeting)

Announcement of 2021 Half Year Results 12 August 2021*

* Provisional – Updates will be posted on www.sbstransit.com.sg

PG 112 SBS TRANSIT ANNUAL REPORT LTD 2020

CONTENTS

114 Directors’ Statement 118 Independent Auditor’s Report 122 Statements of Financial Position 124 Group Income Statement 125 Group Comprehensive Income Statement 126 Statements of Changes in Equity 128 Group Cash Flow Statement 129 Notes to the Financial Statements

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DIRECTORS’ STATEMENT

The Directors present their annual statement together with the audited Consolidated Financial Statements of the Group and Statement of Financial Position and Statement of Changes in Equity of the Company for the financial year ended 31 December 2020.

In the opinion of the Directors, the Consolidated Financial Statements of the Group and the Statement of Financial Position and Statement of Changes in Equity of the Company as set out on pages 71 to 121 are drawn up so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2020, and the financial performance, changes in equity and cash flows of the Group and changes in equity of the Company for the financial year then ended and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts when they fall due.

1 DIRECTORS

The Directors of the Company in office at the date of this statement are:

Lim Jit Poh (Chairman) Yang Ban Seng (Executive Deputy Chairman) Lim Seh Chun Chua Mui Hoong John De Payva Susan Kong Yim Pui Lee Sok Koon Lim Siang Hoe, Benny Tan Kim Siew Yu Ching Man

2 ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES

Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is to enable the Directors of the Company to acquire benefits by means of the acquisition of shares or debentures in the Company or any other body corporate, except for the options mentioned below.

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3 DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

The Directors of the Company holding office at the end of the financial year had no interests in the share capital and debentures of the Company and its related corporations as recorded in the register of Directors’ shareholdings kept by the Company under Section 164 of the Singapore Companies Act, Cap. 50, except as follows:

Shareholdings registered in the name of Directors At At At 1 January 31 December 21 January 2020 2020 2021

Interest in ultimate holding company, ComfortDelGro Corporation Limited

(a) Ordinary shares

Lim Jit Poh 244,425 244,425 244,425 Yang Ban Seng 7,168 7,168 7,168 Yang Ban Seng (Deemed interest) 18,185 18,185 18,185

(b) Options to subscribe for ordinary shares

Yang Ban Seng 660,000 330,000 330,000

(c) Unvested performance share awards under the ComfortDelGro Executive Share Award Scheme

Number of unvested share held by Directors At At 1 January 31 December 2020 2020

Yang Ban Seng 100,000 225,000

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DIRECTORS’ STATEMENT

3 DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES (CONT’D)

Shareholdings registered in the name of Directors At At At 1 January 31 December 21 January 2020 2020 2021

Interest in related company, VICOM Ltd

(a) Ordinary shares

Lim Jit Poh 190,000 760,000* 760,000

* Increased from 190,000 to 760,000 shares due to share split of every one ordinary share in the capital of VICOM Ltd into four ordinary shares with effect from 12 June 2020.

4 SHARE OPTIONS

The SBS Transit Share Option Scheme (“SSOS”) for a period of 10 years was approved by the shareholders of the Company on 9 June 2000. The SSOS expired on 8 June 2010 and hence no option has been granted since then.

As at 31 December 2020 and 31 December 2019, there were no outstanding options as all share options had been exercised or lapsed.

5 AUDIT AND RISK COMMITTEE

At the date of this report, the Audit and Risk Committee comprises five non-executive and independent Directors as follows:

Lee Sok Koon (Chairman) Chua Mui Hoong Lim Seh Chun Lim Siang Hoe, Benny Tan Kim Siew

The Audit and Risk Committee carried out its functions in accordance with Section 201B (5) of the Singapore Companies Act, Cap. 50 and the Code of Corporate Governance 2018.

In performing its functions, the Audit and Risk Committee reviewed the overall scope of both internal and external audits and the assistance given by the Company’s officers to the auditors. It met with the Company’s internal and external auditors three times during the year to discuss the scope and results of their respective audits, and at least once annually without the presence of Management. The Audit and Risk Committee has reviewed the independence of the external auditors, Messrs Deloitte & Touche LLP, including the scope of the non-audit services performed and confirmed that the auditors are independent.

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5 AUDIT AND RISK COMMITTEE (CONT’D)

The Audit and Risk Committee has full access to and has the co-operation of Management and has been given the resources required for it to discharge its function properly. It also has full discretion to invite any director and executive officer to attend its meetings. The external and internal auditors have unrestricted access to the Audit and Risk Committee.

In addition, the Audit and Risk Committee reviewed the Financial Statements of the Group before their submission to the Board of Directors of the Company and provided assurance to the Board on the adequacy of financial, operational, compliance and information technology controls.

The Audit and Risk Committee has recommended to the Board of Directors, the nomination of Deloitte & Touche LLP for re-appointment as auditors of the Company at the forthcoming Annual General Meeting.

6 AUDITORS

The auditors, Deloitte & Touche LLP, have expressed their willingness to accept re-appointment.

ON BEHALF OF THE DIRECTORS

Lim Jit Poh Chairman

Yang Ban Seng Executive Deputy Chairman

Singapore 9 February 2021

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SBS TRANSIT LTD

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying Financial Statements of SBS Transit Ltd (the “Company”) and its subsidiary (the “Group”) which comprise the Statements of Financial Position of the Group and the Company as at 31 December 2020, and the Group Income Statement, Group Comprehensive Income Statement, Group Statement of Changes in Equity and Group Cash Flow Statement and the Statement of Changes in Equity of the Company for the year then ended, and notes to the Financial Statements, including a summary of significant accounting policies, as set out on pages 71 to 121.

In our opinion, the accompanying Consolidated Financial Statements of the Group and the Statement of Financial Position and the Statement of Changes in Equity of the Company are properly drawn up in accordance with the provisions of the Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards (International) (“SFRS(I)s”) so as to give a true and fair view of the consolidated financial position of the Group and the financial position of the Company as at 31 December 2020 and of the consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group and changes in equity of the Company for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority (“ACRA”) Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical requirements that are relevant to our audit of the Financial Statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Statements of the current year. These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

(a) Valuation and Completeness of Provision for Accident Claims

The valuation and completeness of provision for settlement of accident claims (Note 17) involves estimation uncertainty. Management considers the probability and amount of the expected settlement claims based on the number of claims lodged, recent settlements, third party settlement data and accident claims statistics in determining the provision for accident claims as at 31 December 2020.

Our audit procedures included understanding the process used to determine the provision for accident claims. We compared the number of claims and recent settlements to accident claims statistics report issued by insurers; and independently evaluated the reasonableness of the provision estimated by Management. Based on our procedures, Management’s key assumptions appear to be reasonable.

We have also assessed the adequacy and appropriateness of the related disclosures in the financial statements.

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Key Audit Matters (cont’d)

(b) Provision for Rail Contract

One of the Mass Rapid Transit Systems has been making consecutive losses since the commencement of its operations. The Group has assessed that no provision for rail contract is required as at 31 December 2020 based on the financial forecast up to the end of the licence period in relation to this Mass Rapid Transit System.

As disclosed in Note 3 to the financial statements, significant judgement is exercised in key assumptions relating to ridership, changes in fare and quantum, timing and availability of incentives and grants from the authorities in projecting the future financial performance of the operations of this Mass Rapid Transit System.

Our audit procedures focused on evaluating the areas of significant judgement made by the Group in the assessment of provision for rail contract. We discussed with Management on their assessment of provision for rail contract. We obtained the Mass Rapid Transit System’s financial forecast up to the end of the licence period and challenged key assumptions made by the Group, including reviewing relevant corroborative documentation of incentives and grants from the authorities, ridership and changes in fare. Based on our procedures, Management’s key assumptions appear to be reasonable.

We have also assessed the appropriateness of the related disclosures in the financial statements.

Information Other than the Financial Statements and Auditor’s Report Thereon

Management is responsible for the other information. The other information comprises the information included in the annual report but does not include the Financial Statements and our auditor’s report thereon. The Directors’ Statement was obtained prior to the date of this auditor’s report and the remaining other information included in the annual report is expected to be made available to us after that date.

Our opinion on the Financial Statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the other information included in the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate actions in accordance with SSAs.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SBS TRANSIT LTD

Responsibilities of Management and Directors for the Financial Statements

Management is responsible for the preparation of Financial Statements that give a true and fair view in accordance with the provisions of the Act and SFRS(I)s, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair Financial Statements and to maintain accountability of assets.

In preparing the Financial Statements, Management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The Directors’ responsibilities include overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements.

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

(a) Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.

(d) Conclude on the appropriateness of Management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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Auditor’s Responsibilities for the Audit of the Financial Statements (cont’d)

(e) Evaluate the overall presentation, structure and content of the Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

(f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the Financial Statements of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and by the subsidiary corporation incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

The engagement partner on the audit resulting in this independent auditor’s report is Mr. Chua How Kiat.

Deloitte & Touche LLP Public Accountants and Chartered Accountants

Singapore 9 February 2021

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STATEMENTS OF FINANCIAL POSITION 31 DECEMBER 2020

The Group The Company 31 December 31 December 31 December 31 December Note 2020 2019 2020 2019 $’000 $’000 $’000 $’000

ASSETS

Current assets Short-term deposits and bank balances 5 85,560 31,463 84,376 30,280 Trade receivables 6 152,393 167,433 149,865 164,063 Other receivables and prepayments 7 137,630 67,748 425,705 317,693 Inventories 8 111,980 130,571 84,674 104,126 Total current assets 487,563 397,215 744,620 616,162

Non-current assets Subsidiary 9 – – 5,000 5,000 Prepayments 10 6,455 3,385 6,292 3,327 Net investment on sublease 191 – 191 – Vehicles, premises and equipment 11 618,897 715,145 601,439 695,993 Deferred tax assets 12 26,695 21,540 – – Total non-current assets 652,238 740,070 612,922 704,320

Total assets 1,139,801 1,137,285 1,357,542 1,320,482

See accompanying notes to the Financial Statements.

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The Group The Company 31 December 31 December 31 December 31 December Note 2020 2019 2020 2019 $’000 $’000 $’000 $’000

LIABILITIES AND EQUITY

Current liabilities Borrowings 13 25,000 75,000 25,000 75,000 Lease liabilities 29 12,215 11,375 12,215 11,375 Trade and other payables 14 250,098 257,866 213,795 219,384 Deposits received 15 3,915 3,560 3,561 2,917 Deferred grants 16 24,042 – 15,662 – Provision for accident claims 17 19,630 21,205 19,630 21,205 Fuel price equalisation account 19,992 19,992 19,992 19,992 Income tax payable 31,903 30,612 31,903 30,612 Total current liabilities 386,795 419,610 341,758 380,485

Non-current liabilities Lease liabilities 29 59,311 71,801 59,311 71,801 Deferred grants 16 5,843 6,248 5,843 6,248 Deposits received 15 5,818 6,618 4,692 5,553 Deferred tax liabilities 12 62,676 74,940 62,676 74,940 Provision for service benefits and long service awards 18 12,340 11,335 11,759 10,930 Fuel price equalisation account 19,992 19,992 19,992 19,992 Total non-current liabilities 165,980 190,934 164,273 189,464

Total liabilities 552,775 610,544 506,031 569,949

Capital and reserves Share capital 19 100,499 100,499 100,499 100,499 Other reserves 20 40,265 40,543 40,265 40,285 Accumulated profits 446,262 385,699 710,747 609,749 Total equity 587,026 526,741 851,511 750,533

Total liabilities and equity 1,139,801 1,137,285 1,357,542 1,320,482

See accompanying notes to the Financial Statements.

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GROUP INCOME STATEMENT YEAR ENDED 31 DECEMBER 2020

The Group Note 2020 2019 $’000 $’000

Revenue 21 1,230,947 1,445,221

Staff costs 22 (583,342) (713,354) Repairs and maintenance costs (214,620) (192,741) Fuel and electricity costs (90,077) (182,008) Premises costs (47,173) (48,078) Depreciation expense 11 (109,046) (104,070) Other operating costs (106,706) (101,484)

Total operating costs (1,150,964) (1,341,735)

Operating profit 23 79,983 103,486

Net income from investments 24 272 137 Finance costs 25 (3,247) (4,249)

Profit before taxation 77,008 99,374

Tax credit (expense) 26 1,949 (18,086)

Profit attributable to shareholders 78,957 81,288

Earnings per share (in cents): Basic 27 25.32 26.07

Diluted 27 25.32 26.07

See accompanying notes to the Financial Statements.

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GROUP COMPREHENSIVE INCOME STATEMENT YEAR ENDED 31 DECEMBER 2020

The Group 2020 2019 $’000 $’000

Profit attributable to shareholders 78,957 81,288

Items that may be reclassified subsequently to profit or loss: Fair value adjustment on cash flow hedges (278) 1,948

Total comprehensive income for the year attributable to shareholders of the Company 78,679 83,236

See accompanying notes to the Financial Statements.

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STATEMENTS OF CHANGES IN EQUITY YEAR ENDED 31 DECEMBER 2020

The Group Attributable to shareholders of the Company Share Other capital reserves Accumulated Total (Note 19) (Note 20) profits equity $’000 $’000 $’000 $’000

Balance at 1 January 2019 100,162 38,628 348,835 487,625

Total comprehensive income for the year

Profit for the year – – 81,288 81,288 Other comprehensive expense for the year – 1,948 – 1,948 Total – 1,948 81,288 83,236

Transactions recognised directly in equity

Exercise of share options 337 (28) – 309 Payment of dividends (Note 33) – – (44,437) (44,437) Other reserves – (5) 13 8 Total 337 (33) (44,424) (44,120)

Balance at 31 December 2019 100,499 40,543 385,699 526,741

Total comprehensive income (expense) for the year

Profit for the year – – 78,957 78,957 Other comprehensive expense for the year – (278) – (278) Total – (278) 78,957 78,679

Transactions recognised directly in equity

Payment of dividends (Note 33) – – (18,400) (18,400) Other reserves – – 6 6 Total – – (18,394) (18,394)

Balance at 31 December 2020 100,499 40,265 446,262 587,026

See accompanying notes to the Financial Statements.

PG 126 SBS TRANSIT ANNUAL REPORT LTD 2020

The Company Share Other capital reserves Accumulated Total (Note 19) (Note 20) profits equity $’000 $’000 $’000 $’000

Balance at 1 January 2019 100,162 39,450 534,435 674,047

Total comprehensive income for the year

Profit for the year – – 119,738 119,738 Other comprehensive income for the year – 868 – 868 Total – 868 119,738 120,606

Transactions recognised directly in equity

Exercise of share options 337 (28) – 309 Payment of dividends (Note 33) – – (44,437) (44,437) Other reserves – (5) 13 8 Total 337 (33) (44,424) (44,120)

Balance at 31 December 2019 100,499 40,285 609,749 750,533

Total comprehensive income (expense) for the year

Profit for the year – – 119,392 119,392 Other comprehensive expense for the year – (20) – (20) Total – (20) 119,392 119,372

Transactions recognised directly in equity

Payment of dividends (Note 33) – – (18,400) (18,400) Other reserves – – 6 6 Total – – (18,394) (18,394)

Balance at 31 December 2020 100,499 40,265 710,747 851,511

See accompanying notes to the Financial Statements.

PG PG 126 127 SBS TRANSIT LTD

GROUP CASH FLOW STATEMENT YEAR ENDED 31 DECEMBER 2020

The Group 2020 2019 $’000 $’000

Operating activities Profit before taxation 77,008 99,374 Adjustments for: Depreciation expense 109,046 104,070 Finance costs 3,247 4,249 Net gain on disposal of vehicles and equipment (274) (76) Interest income (272) (137) Provision for service benefits and long service awards 1,720 1,167 Provision for accident claims 2,980 7,400 Allowance for inventory obsolescence 20,159 1,887 Allowance for expected credit losses 395 – Operating cash flows before movements in working capital 214,009 217,934

Trade receivables 14,852 (43,924) Other receivables and prepayments (70,733) (10,413) Inventories (1,568) (15,316) Trade and other payables (7,190) (34,401) Deferred grants 23,637 (78) Deposits received (445) 433 Payment of service benefits and long service awards (715) (836) Payment of accident claims (4,555) (5,728) Receipt from net investment on sublease 160 181 Cash generated from operations 167,452 107,852

Income tax paid (14,122) (21,863) Interest paid arising from leases (2,111) (2,341) Net cash from operating activities 151,219 83,648

Investing activities Interest received 270 141 Proceeds from disposal of vehicles and equipment 1,852 124 Purchase of vehicles, premises and equipment (18,315) (28,976) Net cash used in investing activities (16,193) (28,711)

Financing activities New loans raised 130,500 406,000 Repayment of borrowings (180,500) (406,000) Payments under lease liabilities (11,329) (10,157) Proceeds from share issue – 309 Interest paid (1,206) (1,908) Dividends paid (18,400) (44,437) Others 6 8 Net cash used in financing activities (80,929) (56,185)

Net increase (decrease) in cash and cash equivalents 54,097 (1,248) Cash and cash equivalents at beginning of year 31,463 32,711 Cash and cash equivalents at end of year (Note 5) 85,560 31,463

See accompanying notes to the Financial Statements.

PG 128 SBS TRANSIT ANNUAL REPORT LTD 2020

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

1 GENERAL

The Company (Registration No. 199206653M) is incorporated in Singapore with its registered office and principal place of business at 205 Braddell Road, Singapore 579701. The Company is listed on the Singapore Exchange Securities Trading Limited.

The principal activities of the Company are those of the provision of public transport services, namely bus and rail services.

The principal activities of the subsidiary are described in Note 9 to the Financial Statements.

The Financial Statements are expressed in Singapore dollars and all values are rounded to the nearest thousand ($’000) except when otherwise indicated.

The Consolidated Financial Statements of the Group for the financial year ended 31 December 2020 and the Statement of Financial Position and Statement of Changes in Equity of the Company as at 31 December 2020 were authorised for issue by the Board of Directors on 9 February 2021.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING – The Financial Statements have been prepared in accordance with the historical cost basis, except as disclosed in the accounting policies below and are drawn up in accordance with the provisions of the Singapore Companies Act, Cap. 50 and Singapore Financial Reporting Standards (International) (“SFRS(I)s”).

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability which market participants would take into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these Consolidated Financial Statements is determined on such a basis, except for share-based payment transactions that are within the scope of SFRS(I) 2 Share-based Payment, leasing transactions that are within the scope of SFRS(I) 16 Leases, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in SFRS(I) 1-2 Inventories or value in use in SFRS(I) 1-36 Impairment of Assets.

ADOPTION OF NEW AND REVISED STANDARDS – On 1 January 2020, the Group has adopted all the new and revised SFRS(I)s that are relevant to its operations and effective from that date. The adoption of these new/revised SFRS(I)s does not result in changes to the Group’s accounting policies and has no material effect on the amounts reported for the current or prior years except as discussed below.

Impact of the initial application of COVID-19-Related Rent Concessions amendment to SFRS(I) 16

In May 2020, the Accounting Standards Council issued COVID-19-Related Rent Concessions (Amendment to SFRS(I) 16) that provides practical relief to lessees in accounting for rent concessions occurring as a direct consequence of COVID-19, by introducing a practical expedient to SFRS(I) 16. The practical expedient permits a lessee to elect not to assess whether a COVID-19-related rent concession is a lease modification. A lessee that makes this election shall account for any change in lease payments resulting from the COVID-19-related rent concession the same way it would account for the change applying SFRS(I) 16 if the change were not a lease modification. The amendment is effective for annual periods beginning on or after 1 June 2020, with early application permitted.

PG PG 128 129 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

The practical expedient applies only to rent concessions occurring as a direct consequence of COVID-19 and only if all of the following conditions are met:

(a) The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

(b) Any reduction in lease payments affects only payments originally due in on or before 30 June 2021 (a rent concession meets this condition if it results in reduced lease payments on or before 30 June 2021 and increased lease payments that extend beyond 30 June 2021); and

(c) There is no substantive change to other terms and conditions of the lease.

In the current financial year, the Group has applied the amendment to SFRS(I) 16 in advance of its effective date.

Impact of accounting for changes in lease payments applying the exemption

The Group has applied the practical expedient retrospectively to all rent concessions that meet the conditions in SFRS(I) 16:46B, and has not restated prior period figures.

NEW/REVISED STANDARDS AND IMPROVEMENTS TO THE STANDARDS NOT YET ADOPTED – The Group has not applied the following accounting standards that are relevant to the Group and have been issued as at the end of the reporting period but not yet effective:

• Amendments to SFRS(I) 3 Reference to the Conceptual Framework(1)

• Amendments to SFRS(I) 1-16 Property, Plant and Equipment – Proceeds before Intended Use(1)

• Amendments to SFRS(I) 1-37 Onerous Contracts – Cost of Fulfilling a Contract(1)

• Annual Improvements to SFRS(I) 2018 – 2020(1)

• Amendments to SFRS(I) 1 Classification of Liabilities as Current or Non-current(2)

(1) Applies to annual periods beginning on or after 1 January 2022. (2) Applies to annual periods beginning on or after 1 January 2023.

Management anticipates that the adoption of the above SFRS(I) pronouncements in future periods will not have a material impact on the Financial Statements of the Group in the period of their initial adoption.

BASIS OF CONSOLIDATION – The Consolidated Financial Statements incorporate the Financial Statements of the Company and an entity controlled by the Company. Control is achieved when the Company:

• Has power over the investee;

• Is exposed, or has rights, to variable returns from its involvement with the investee; and

• Has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

PG 130 SBS TRANSIT ANNUAL REPORT LTD 2020

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the Group Income Statement and Group Comprehensive Income Statement from the date the Company gains control until the date when the Company ceases to control the subsidiary.

When necessary, adjustments are made to the Financial Statements of the subsidiary to bring its accounting policies in line with those consistently used by the Group.

Changes in the Group’s ownership interests in the subsidiary that do not result in the Group losing control over the subsidiary are accounted for as equity transactions.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

In the Statement of Financial Position of the Company, investment in subsidiary is carried at cost less any impairment in net recoverable value that has been recognised in Profit or Loss.

BUSINESS COMBINATIONS – The acquisition of subsidiary is accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values, at the date of acquisition, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group to the former owners of the acquiree in exchange for control of the acquiree. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under SFRS(I) 3 Business Combinations are recognised at their fair values at the acquisition date except for deferred tax assets or liabilities which are recognised and measured in accordance with SFRS(I) 1-12 Income Taxes. Acquisition-related costs are recognised in Profit or Loss as incurred.

The interest of the non-controlling shareholders in the acquiree is initially measured at the non-controlling interest’s proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

FINANCIAL INSTRUMENTS – Financial assets and financial liabilities are recognised on the Group’s Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through Profit or Loss (“FVTPL”)) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in Profit or Loss.

Financial assets

All financial assets are recognised and derecognised on a trade date basis where the purchase or sale of financial assets is under a contract whose terms require delivery of assets within the time frame established by the market concerned.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

PG PG 130 131 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Classification of financial assets

Debt instruments that meet the following conditions are subsequently measured at amortised cost:

• the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Investments in debt instruments that meet both the following conditions are subsequently measured at fair value through other comprehensive income (“FVTOCI”):

• the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

All other financial assets are subsequently measured at FVTPL.

Despite the aforegoing, the Group may make the following irrevocable election/designation at initial recognition of a financial asset:

• the Group may irrevocable elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met; and

• the Group may irrevocable designate a debt investment that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.

Amortised cost and effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance.

Debt instruments classified as FVTOCI

Investments in debt instruments at FVTOCI are initially measured at fair value plus transaction costs. Subsequently, any gains or losses on such a financial asset are recognised in Other Comprehensive Income, except for impairment gains or losses and foreign exchange gains and losses until the financial asset is derecognised. When the financial asset is derecognised the cumulative gain or loss previously recognised in Other Comprehensive Income is reclassified from equity to Profit or Loss for the period.

Interest income is recognised in Profit or Loss and is included in the “Net Income from Investments” line item in Profit or Loss.

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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Impairment of financial assets

The Group recognises a loss allowance for expected credit losses (“ECL”) on investments in debt instruments that are measured at amortised cost or at FVTOCI. The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

The Group applies the simplified approach permitted by SFRS(I) 9 Financial Instruments for trade receivables. The ECL on these financial assets are estimated based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors as well as current and forecast general economic conditions at the reporting date.

To assess whether there is a significant increase in credit risk, the Group compares the risk of a default occurring on the asset as at the reporting date with the rate of default as at the date of initial recognition. It considers available reasonable and supportive forward-looking information, where relevant.

A default on a financial asset is when the counterparty fails to make contractual payments within a specific period after the credit period granted.

A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired include taking into consideration observable data about the significant financial difficulty of the issuer or the borrower; a breach of contract, such as a default or past due event; it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation.

Where receivables have been written off, the Group continues to recover the receivables due. Where recoveries are made, these are recognised in Profit or Loss.

Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognised in Profit or Loss. In addition, on derecognition of an investment in a debt instrument classified as at FVTOCI, the cumulative gain or loss previously accumulated in the Investment Revaluation Reserve is reclassified to Profit or Loss.

Financial liabilities and equity instruments

Classification as debt or equity

Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

PG PG 132 133 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Borrowings

Interest-bearing loans are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised in Profit or Loss over the term of the borrowings.

Trade and other payables

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest method, with interest expense recognised on an effective yield basis.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in Profit or Loss.

Hedging instruments and hedge accounting

The Group uses hedging instruments to manage its exposure to fuel price fluctuation, interest rate and foreign exchange rate risks. The Group uses hedging instruments such as forwards and options, to manage these risks. The use of hedging instruments is governed by the Group’s policies which provide written principles on the use of financial instruments consistent with the Group’s risk management strategy (see Note 32).

Hedging instruments are initially recognised at fair value on the contract date, and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in Profit or Loss immediately unless the hedging instrument is designated and effective as a hedging instrument, in which event the timing of the recognition in Profit or Loss depends on the nature of the hedge relationship. The Group designates its hedging instruments as either fair value hedges or cash flow hedges.

Hedging instruments are carried as assets when the fair value is positive and as liabilities when the fair value is negative. The fair value of hedging instrument is classified as a non-current asset or a non-current liability if the maturity of the hedge relationship exceeds 12 months and as a current asset or current liability if the maturity of the hedge relationship is within 12 months.

At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and hedged item, along with its risk management objective and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item.

The Group designates any interest rate swap for hedging of interest rate risk arising from borrowings as cash flow hedges. Hedges of both foreign currency risk and fuel price risk for future purchases of goods are designated as cash flow hedges.

Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting.

Note 32 (c) contains details of the fair values of the hedging instruments.

PG 134 SBS TRANSIT ANNUAL REPORT LTD 2020

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Hedging instruments and hedge accounting (cont’d)

(a) Fair value hedge

Changes in the fair value of hedging instruments that are designated and qualify as fair value hedges are recorded in Profit or Loss immediately, together with any changes in the fair value of the hedged item that is attributable to the hedged risk.

(b) Cash flow hedge

The effective portion of changes in fair value of hedging instruments that are designated and qualify as cash flow hedges are recognised in Other Comprehensive Income. The gain or loss relating to the ineffective portion is recognised immediately in Profit or Loss. Amounts recognised in Other Comprehensive Income are taken to Profit or Loss when the hedged item is realised.

Leases

The Group as lessor

The Group enters into lease agreements as a lessor with respect to its property.

Leases for which the Group is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.

When the Group is an intermediate lessor, it accounts for the head lease and the sublease as two separate contracts. The sublease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

The Group as lessee

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses the incremental borrowing rate specific to the lessee.

PG PG 134 135 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

The Group as lessee (cont’d)

Lease payments included in the measurement of the lease liability comprise:

• Fixed lease payments (including in-substance fixed payments), less any lease incentives;

• Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

• The amount expected to be payable by the lessee under residual value guarantees;

• The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

• Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is presented as a separate line in the Statements of Financial Position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

• The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate;

• The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used); or

• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under SFRS(I) 1-37. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

PG 136 SBS TRANSIT ANNUAL REPORT LTD 2020

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

The Group as lessee (cont’d)

The right-of-use assets are presented within vehicles, premises and equipment in the Statement of Financial Position.

The Group applies SFRS(I) 1-36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in Note 2.

As a practical expedient, SFRS(I) 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Group has not used this practical expedient. For contracts that contain a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

INVENTORIES – Inventories are stated at cost less allowance for inventory obsolescence. Allowance is made for obsolete, slow-moving and defective inventories based on management’s estimates and judgement, taking into consideration inventories’ physical and market conditions, inventory turnover, etc.

Cost comprises cost of purchase and those costs that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method.

VEHICLES, PREMISES AND EQUIPMENT – Vehicles and equipment are stated at cost less accumulated depreciation and any provision for impairment.

Capital projects in progress comprising development and construction costs incurred during the period of construction are carried at cost, less any recognised provision for impairment. Depreciation on these assets, on the same basis as other vehicles, premises and equipment, commences when the assets are available for use.

Depreciation is charged so as to write off the cost of the assets, other than capital projects in progress, over the estimated useful lives using the straight-line method, on the following bases:

Number of years

Buses 17 Leasehold land and buildings (including leasehold improvements) Over the remaining lease period Computers and automated equipment 3 to 5 Workshop machinery, tools and equipment 3 to 7 Motor vehicles 5 to 10 Furniture, fittings and equipment 5 to 7

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

The gain or loss arising on disposal or retirement of an item of vehicles, premises and equipment is determined as the difference between the sales proceeds and the carrying amounts of the asset and is recognised in Profit or Loss.

Fully depreciated vehicles, premises and equipment are retained in the Financial Statements until they are no longer in use.

PG PG 136 137 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

IMPAIRMENT OF NON-FINANCIAL ASSETS – At the end of each reporting year, the Group reviews the carrying amounts of its non-financial assets, if any, to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the provision for impairment (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. A provision for impairment is recognised immediately in Profit or Loss.

Where provision for impairment subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no provision for impairment been recognised for the asset (cash-generating unit) in prior years. A reversal of a provision for impairment is recognised immediately in Profit or Loss.

FUEL PRICE EQUALISATION ACCOUNT – At the direction of the Public Transport Council (“PTC”), a fuel price equalisation account (“FPEA”) has been set up to account for diesel price and electricity tariff adjustment charge for the purpose of mitigating the effects of any increase in fuel price and electricity tariff.

Annual contributions to the FPEA may be required as determined by the PTC, based on the reference electricity tariff and diesel price for the year.

Applications can be made to the PTC to seek approval for a draw down as may be catered for by the purpose of the FPEA mechanism, provided that the amount drawn does not exceed half of the available FPEA balance.

PROVISION FOR ACCIDENT CLAIMS – Claims for accident, public liability and others are provided in the Financial Statements based on the claims outstanding and the estimated amounts payable.

PROVISIONS – Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

DEFERRED INCOME – Deferred income comprises advance receipts from customers that are recognised to Profit or Loss when the services are rendered.

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2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

SERVICE BENEFITS – These comprise the following:

(a) Retirement benefits – Under the Collective Agreement entered into by the Group with the Union, a retirement benefit subject to a maximum of $3,000 is payable to an employee retiring on or after attaining the retirement age and on completion of at least five years of service. Provision is made in the Financial Statements based on the number of years of service rendered by qualifying employees and discounted to present value using the market yield of Singapore Government Bonds at end of the reporting period and after taking into account an estimated attrition rate. The estimated attrition rate used is based on the Management’s best estimate using historical trend.

(b) Long service awards – Staff serving more than 15 years are entitled to long service awards of $500 for 15 years of service, $700 for 20 years, $900 for 25 years, $1,100 for 30 years and $1,300 for 35 years. Provision is made in the Financial Statements based on the number of years of service rendered by qualifying employees.

The provision for retirement benefits and long service awards is discounted using the market yield of Singapore Government Bonds at end of the reporting year.

(c) Apart from the retirement benefits described in (a) above, the Group participates in a defined contribution plan managed by the Singapore Government (“Singapore Central Provident Fund”). Payments made to the plan are charged as an expense when the employees have rendered the services entitling them to the contributions.

(d) Employee leave entitlement – Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting year.

(e) Share-based payments – The Company issues share options to certain employees and Directors. Share options are measured at fair value of the equity instruments (excluding the effect of non market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the share options is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest.

Fair value is measured using the Black-Scholes pricing model. The expected life used in the model has been adjusted, based on Management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

GOVERNMENT GRANTS – Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and the grants will be received.

Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate.

Government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non- current assets are recognised as deferred income in the Statement of Financial Position and transferred to Profit or Loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.

Government grants in relation to form of a transfer of a non-monetary asset, such as land or other resources, for the use of the Group, are recognised as both asset and grant at a nominal amount.

PG PG 138 139 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

REVENUE RECOGNITION – The Group recognises revenue from the following sources:

• Transport services

• Lease revenue

• Other commercial services

Revenue is measured based on consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control of a product or service to a customer.

Revenue from transport services comes from the provision of bus and rail services to commuters travelling on public transport systems. Revenue from transport regulator for scheduled bus services is recognised as and when services are rendered, including an estimation of the expected consideration on achieving certain performance targets. Revenue from commuters for rail services is recognised as and when services are rendered and revenue from transport regulator for rail services relates to performance incentives for achieving certain performance and service quality targets.

Lease revenue comprises leasing fees for the buses and other assets used in the provision of bus services under the Bus Contracting Model (“BCM”). Lease revenue is recognised upon completion of services.

Revenue from other commercial services comprises advertising and rental income. Advertising production revenue is recognised when production is completed and advertising media revenue is recognised on a time proportionate basis over the term relevant contract. Rental income is recognised on a straight-line basis over the term of the relevant lease.

BORROWING COSTS – Borrowing costs incurred to finance the purchase of qualifying assets are capitalised during the period of time that is required to complete and prepare the asset for its intended use. Other borrowing costs are recognised in Profit or Loss in the period which they are incurred.

INCOME TAX – Current income tax liabilities (and assets) for current and prior periods are recognised at the amounts expected to be paid to (or recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting year.

Deferred income tax assets/liabilities are recognised for deductible/taxable temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. The principal temporary differences arise from depreciation, provision for fuel equalisation and future tax benefits from certain provisions are not allowed for tax purposes until a later period. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred tax liabilities are recognised on taxable temporary differences arising from investment in subsidiary except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting year and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

PG 140 SBS TRANSIT ANNUAL REPORT LTD 2020

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Current and deferred tax are recognised as an expense or income in Profit or Loss, except when they relate to items credited or debited outside Profit or Loss (either in Other Comprehensive Income or directly in equity), in which case the tax is also recognised outside Profit or Loss (either in Other Comprehensive Income or directly in equity), or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or determining the excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost.

FOREIGN CURRENCY TRANSACTIONS – The individual Financial Statements of each Group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The Consolidated Financial Statements of the Group and the Statement of Financial Position and Statement of Changes in Equity of the Company are presented in Singapore dollars, which is the functional currency of the Company and the presentation currency for the Consolidated Financial Statements.

Transactions in currencies other than each Group entity’s functional currency are recorded at the rate of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of each reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in Profit or Loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in Profit or Loss for the period except for differences arising on the translation of non-monetary items in respect of which gains and losses are recognised in Other Comprehensive Income. For such non-monetary items, any exchange component of that gain or loss is also recognised in Other Comprehensive Income.

In order to hedge its exposure to certain foreign exchange risks, the Group enters into forward contracts and options (please see above for details of the Group’s accounting policies in respect of such hedging instruments).

CASH AND CASH EQUIVALENTS IN THE CASH FLOW STATEMENT OF THE GROUP – Cash and cash equivalents in the Cash Flow Statement of the Group comprise cash on hand and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in Note 2, the Management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period of the revision and future periods if the revision affects both current and future periods.

PG PG 140 141 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (CONT’D)

Critical judgements in applying the Group’s accounting policies

The following are the critical judgements, apart from those involving estimates (see below), that Management has made in the process of applying the Group’s accounting policies and that have a significant effect on the amounts recognised in the financial statements:

Provision for rail contract

One of the Mass Rapid Transit Systems has been making consecutive losses since the commencement of its operations. The Group has assessed that no provision for rail contract is required as at 31 December 2020 based on the financial forecast up to the end of the licence period in relation to this Mass Rapid Transit System.

Significant judgment is exercised in key assumptions relating to ridership, changes in fare and quantum, timing and availability of incentives and grants from the authorities in projecting the future financial performance of the operations of this Mass Rapid Transit System.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:

1. Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

(a) Accident claims

Claims for property damage and personal injury are provided in the Financial Statements based on the claims outstanding as of the end of the financial year and estimated amounts payable. The past claims history and payment are used as a basis to estimate the amounts in which the Group will have to pay to third parties for such claims. Provision for claims is disclosed in Note 17.

(b) Retirement benefits

Retirement benefits subject to a maximum of $3,000 is payable to a retiring employee on or after attaining the retirement age and on completion of at least five years of service. Provision is made based on the number of years of service rendered by qualifying employees and discounted to present value using the market yield of Singapore Government Bonds at end of the reporting period of 0.36% to 1.16% (2019 : 1.60% to 1.88%) per annum and after taking into account an estimated attrition rate. The estimated attrition rate used is based on the Management’s best estimate using historical trend. Provision for retirement benefits is disclosed in Note 18.

PG 142 SBS TRANSIT ANNUAL REPORT LTD 2020

3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (CONT’D)

Key sources of estimation uncertainty (cont’d)

1. Provisions (cont’d)

(c) Long service awards

Staff with more than 15 years of service are entitled to long service awards of $500 for 15 years of service, $700 for 20 years, $900 for 25 years, $1,100 for 30 years and $1,300 for 35 years. Provision is made based on the number of years of service rendered by qualifying employees and discounted to present value using the market yield of Singapore Government Bonds at end of the reporting period of 0.36% to 1.16% (2019 : 1.60% to 1.88%) per annum and after taking into account an estimated attrition rate. The estimated attrition rate used is based on the Management’s best estimate using historical trend. Provision for long service awards is disclosed in Note 18.

2. Allowance for inventory obsolescence

The Group’s inventories comprised mainly parts, accessories and consumable stock required for the operation and maintenance of vehicles and equipment.

The Group’s recognition basis for inventory allowance is enhanced to take into account the rail contract term in determining its useful life as the rail contract term approaches mid-life. In addition, Management identifies inventories that are slow moving and evaluates the carrying value of inventories. An allowance for inventory obsolescence is recognised for these inventories based on its useful life and inventory turnover. This basis of recognising allowance for inventory obsolescence represents a change in Group accounting estimate from prior year, which the previous recognition basis was based on the relevance of the inventories per industry standards (i.e. Allowance was recognised when the inventories were phased out due to changes in specifications/ requirements). The change in accounting estimate will be accounted for prospectively in the financial statements.

Allowance for inventory obsolescence is disclosed in Note 8.

3. Useful lives of vehicles, premises and equipment

As described in Note 2, the Group reviews the estimated useful lives of vehicles, premises and equipment at the end of each annual reporting period. During the financial year, Management determined that the estimated useful lives of vehicles, premises and equipment are appropriate and no material revision is required. The carrying amounts of the vehicles, premises and equipment are disclosed in Note 11.

PG PG 142 143 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

4 HOLDING COMPANY, RELATED COMPANY AND RELATED PARTY TRANSACTIONS

The Company’s immediate and ultimate holding company is ComfortDelGro Corporation Limited, incorporated in Singapore.

Related companies in these Financial Statements refer to members of the ultimate holding company’s group of companies.

Some of the Group’s transactions and arrangements are with related parties and other members of the ultimate holding company’s group of companies and the effects of these on the basis determined between the parties are reflected in these Financial Statements.

Related parties include associate or joint venture of a member of the ultimate holding company.

Significant intercompany and related party transactions during the financial year, other than those disclosed elsewhere in the notes to the Financial Statements are as follows:

The Group 2020 2019 $’000 $’000

Purchases of inventories from a related company 26,907 28,568 Rental expense from: Ultimate holding company 2,806 3,316 Related company 592 600 Purchase of goods and services from: Ultimate holding company 5,626 4,300 Related companies 2,866 2,929 Associate of the ultimate holding company 159 27 Sales of goods and services to: Ultimate holding company (22) (21) Related companies (1,067) (990) Associate of the ultimate holding company (4) (7) Transfer of computers and automated equipment to a related company (4) – Rental income from related companies (204) (243)

The amounts outstanding are unsecured, interest-free and are repayable on demand, unless otherwise stated as disclosed in Note 6 and 7. No guarantees have been given or received.

No expense has been recognised in the financial year for bad and doubtful debts in respect of the amounts owed by related companies.

PG 144 SBS TRANSIT ANNUAL REPORT LTD 2020

5 SHORT-TERM DEPOSITS AND BANK BALANCES

The Group The Company 31 December 31 December 31 December 31 December 2020 2019 2020 2019 $’000 $’000 $’000 $’000

Cash and bank balances 5,560 5,963 4,376 4,780 Fixed deposits 80,000 25,500 80,000 25,500 Total 85,560 31,463 84,376 30,280

Fixed deposits bear effective interest rate of 0.12% to 0.32% (2019 : 1.65% to 1.77%) per annum and for a tenure of approximately 47 to 90 days (2019 : 10 to 16 days). The fixed deposits can be readily converted to a known amount of cash and are subject to an insignificant risk of changes in value.

6 TRADE RECEIVABLES

The Group The Company 31 December 31 December 31 December 31 December 2020 2019 2020 2019 $’000 $’000 $’000 $’000

Related companies (Note 4) 6 14 6 14 Related parties (Note 4) 81 99 68 73 Outside parties 152,499 167,329 149,947 163,985 152,586 167,442 150,021 164,072 Allowance for expected credit losses (193) (9) (156) (9) Total 152,393 167,433 149,865 164,063

The amounts outstanding are interest-free and the credit period ranges from 7 to 30 days (2019 : 7 to 30 days).

The expected risks of default on trade receivables at the reporting date is insignificant as a majority of receivables is from the Land Transport Authority (“LTA”). For the remaining receivables, the concentration of credit risk is limited due to the customer base being large and unrelated. Management is of the view that there has not been a significant change in credit quality and the amounts are still considered recoverable.

An allowance has been made for estimated irrecoverable amounts of the Group of $193,000 (2019 : $9,000) and of the Company of $156,000 (2019 : $9,000). Allowance recognised in Profit or Loss amounted to $188,000 (2019 : $9,000) for Group and $151,000 (2019 : $9,000) for Company. This allowance is determined by reference to expected credit losses which incorporate forward looking estimates. There has been no significant change in the estimation techniques or significant assumptions made during the current reporting period in assessing the allowance for expected credit losses.

PG PG 144 145 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

7 OTHER RECEIVABLES AND PREPAYMENTS

The Group The Company 31 December 31 December 31 December 31 December 2020 2019 2020 2019 $’000 $’000 $’000 $’000

Receivables from: Ultimate holding company (Note 4) 23 – 23 – Related companies (Note 4) 812 736 812 736 Subsidiary (Note 9) – – 325,925 262,501 835 736 326,760 263,237

Prepayments 16,664 12,628 12,609 7,266 Interest receivable 11 9 11 9 Staff advances 533 329 325 156 Security deposits from outside parties 1,274 1,091 1,257 1,074 Accrued income 53,945 8,755 28,223 3,589 Net investment on sublease 228 30 228 30 Grant receivables 15,345 – 9,443 – Receivables from outside parties 49,002 44,170 47,052 42,332 137,837 67,748 425,908 317,693 Allowance for expected credit losses (207) – (203) – Total 137,630 67,748 425,705 317,693

Majority of the other receivables are due from creditworthy parties where Management has assessed the credit risk to be low. Management is of the view that there has not been a significant change in credit quality and the amounts are still considered recoverable.

An allowance has been made for estimated irrecoverable amounts of the Group of $207,000 (2019 : $NIL) and of the Company of $203,000 (2019 :$NIL). Allowance recognised in Profit or Loss amounted to $207,000 (2019 : $NIL) for the Group and $203,000 (2019 : $NIL) for the Company. This allowance is determined by reference to expected credit losses which incorporate forward looking estimates. There has been no significant change in the estimation techniques or significant assumptions made during the current reporting period in assessing the allowance for expected credit losses.

Grants receivables relate to the amounts granted to the Group and the Company under the COVID-19 Government Relief Measures, mainly the Jobs Support Scheme (“JSS”) initiative by the Singapore Government as disclosed in Note 22 (a) (ii). The initiative is intended to defray certain manpower costs.

PG 146 SBS TRANSIT ANNUAL REPORT LTD 2020

8 INVENTORIES

Inventories comprised mainly parts, accessories and consumable stock required for the operation and maintenance of vehicles and equipment.

At the end of the reporting period, the inventories are stated net of allowance of $21,602,000 (2019: $1,887,000) for the Group and $17,448,000 (2019: $1,887,000) for the Company. The cost of inventories recognised as an expense includes $20,159,000 (2019 : $1,887,000) in respect of write-downs of inventories. The carrying amount of the Group’s inventories is $111,980,000 (2019: $130,571,000) and $84,674,000 (2019: $104,126,000) for the Company.

9 SUBSIDIARY

The Company has investment in unquoted equity shares representing 100% equity interest in SBS Transit DTL Pte. Ltd. incorporated in Singapore. The cost of investment in the subsidiary was $5,000,000 (2019 : $5,000,000). The subsidiary is audited by Deloitte & Touche LLP, Singapore.

The principal activities of the subsidiary are those of the operation and maintenance of Downtown Line.

The Group is in compliance with Listing Rules 712 and 715 of The Singapore Exchange Securities Trading Limited as suitable auditing firms have been appointed to meet the Group’s audit obligations.

10 PREPAYMENTS

Prepayments pertain to downpayments for the purchase of vehicles, premises and equipment.

11 VEHICLES, PREMISES AND EQUIPMENT

The Group The Company 31 December 31 December 31 December 31 December 2020 2019 2020 2019 $’000 $’000 $’000 $’000

Vehicles, premises and equipment owned (a) 548,562 630,884 531,104 611,732 Right-of-use assets classified within vehicles, premises and equipment (b) 70,335 84,261 70,335 84,261 Total 618,897 715,145 601,439 695,993

PG PG 146 147 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

11 VEHICLES, PREMISES AND EQUIPMENT (CONT’D)

(a) Vehicles, premises and equipment owned

Computers Workshop Leasehold Leasehold and machinery, Furniture, Capital land and improve- automated tools and Motor fittings and projects in Buses building(N1) ments equipment equipment vehicles equipment progress Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

The Group

Cost or valuation: At 1 January 2019 1,124,995 63,989 52,764 20,639 46,273 8,516 18,915 5,159 1,341,250 Amount reclassified as right-of-use assets – (17,600) – – –– – – (17,600) Additions 1,251 219 2,727 5,498 5,737 1,006 2,774 12,399 31,611 Disposals (10,201) – – (757) (194) (496) (336) – (11,984) Reclassification 3,961 – 504 1,396 577 – 520 (6,958) – Transfer to Ultimate holding company – – – (1) –– – – (1) At 31 December 2019 1,120,006 46,608 55,995 26,775 52,393 9,026 21,873 10,600 1,343,276 Additions 60 73 235 2,159 5,291 1,151 903 5,373 15,245 Disposals (3,158) – – (2,571) (2,724) (516) (510) – (9,479) Reclassification 1,656 – 903 2,862 2,574 – 161 (8,156) – Transfer to related company –– – (10) –– – – (10) At 31 December 2020 1,118,564 46,681 57,133 29,215 57,534 9,661 22,427 7,817 1,349,032

Accumulated depreciation: At 1 January 2019 524,069 10,977 36,091 17,343 29,107 5,339 13,020 – 635,946 Amount reclassified as right-of-use assets – (3,023) – – –– – – (3,023) Depreciation 75,135 3,433 2,451 3,067 4,669 988 1,663 – 91,406 Disposals (10,200) – – (757) (190) (455) (334) – (11,936) Transfer to Ultimate holding company – – – (1) –– – – (1) At 31 December 2019 589,004 11,387 38,542 19,652 33,586 5,872 14,349 – 712,392 Depreciation 77,706 3,440 2,418 4,842 4,697 1,050 1,836 – 95,989 Disposals (3,158) – – (2,568) (1,194) (510) (475) – (7,905) Transfer to related company –– – (6) –– – – (6) At 31 December 2020 663,552 14,827 40,960 21,920 37,089 6,412 15,710 – 800,470

Carrying amount: At 31 December 2020 455,012 31,854 16,173 7,295 20,445 3,249 6,717 7,817 548,562

At 31 December 2019 531,002 35,221 17,453 7,123 18,807 3,154 7,524 10,600 630,884

PG 148 SBS TRANSIT ANNUAL REPORT LTD 2020

11 VEHICLES, PREMISES AND EQUIPMENT (CONT’D)

(a) Vehicles, premises and equipment owned (cont’d)

Computers Workshop Leasehold Leasehold and machinery, Furniture, Capital land and improve- automated tools and Motor fittings and projects in Buses building(N1) ments equipment equipment vehicles equipment progress Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

The Company

Cost or valuation: At 1 January 2019 1,124,995 63,989 35,787 17,957 40,619 6,389 16,705 5,151 1,311,592 Amount reclassified as right-of-use assets – (17,600) – – –– – – (17,600) Additions 1,251 219 2,332 4,759 5,107 650 2,654 12,264 29,236 Disposals (10,201) – – (726) (194) (496) (295) – (11,912) Reclassification 3,961 – 504 1,396 577 – 520 (6,958) – Transfer to Ultimate holding company –– – (1) – – – – (1) Transfer to subsidiary –– – (4) – – – – (4) At 31 December 2019 1,120,006 46,608 38,623 23,381 46,109 6,543 19,584 10,457 1,311,311 Additions 60 73 202 1,602 4,603 1,151 866 5,184 13,741 Disposals (3,158) – – (2,461) (2,723) (516) (487) – (9,345) Reclassification 1,656 – 897 2,862 2,574 – 161 (8,150) – Transfer to related company –– – (10) – – – – (10) Transfer from subsidiary –– – 1 –– – – 1 At 31 December 2020 1,118,564 46,681 39,722 25,375 50,563 7,178 20,124 7,491 1,315,698

Accumulated depreciation: At 1 January 2019 524,069 10,977 32,408 15,380 26,898 4,215 12,182 – 626,129 Amount reclassified as right-of-use assets – (3,023) – – –– – – (3,023) Depreciation 75,135 3,433 1,321 2,585 3,857 662 1,349 – 88,342 Disposals (10,200) – – (726) (189) (455) (293) – (11,863) Transfer to Ultimate holding company –– – (1) – – – – (1) Transfer to subsidiary –– – (5) – – – – (5) At 31 December 2019 589,004 11,387 33,729 17,233 30,566 4,422 13,238 – 699,579 Depreciation 77,706 3,440 1,301 4,197 3,869 756 1,529 – 92,798 Disposals (3,158) – – (2,459) (1,193) (510) (457) – (7,777) Transfer to related company –– – (6) – – – – (6) At 31 December 2020 663,552 14,827 35,030 18,965 33,242 4,668 14,310 – 784,594

Carrying amount: At 31 December 2020 455,012 31,854 4,692 6,410 17,321 2,510 5,814 7,491 531,104

At 31 December 2019 531,002 35,221 4,894 6,148 15,543 2,121 6,346 10,457 611,732

(N1) : The Group’s leasehold building at Soon Lee bus depot are stated at their revalued amounts (Note 20) being the fair value at the date of revaluation based on valuation performed by an independent external valuer. The revaluation was done pursuant to the agreement in the Negotiated Contract under the BCM (Note 35). As at 31 December 2020, the carrying amount of the Group’s leasehold building at Soon Lee bus depot would have been $10,913,000 (2019 : $12,003,000), had the leasehold building been carried at cost less accumulated depreciation.

PG PG 148 149 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

11 VEHICLES, PREMISES AND EQUIPMENT (CONT’D)

(a) Vehicles, premises and equipment owned (cont’d)

Details of leasehold land and building owned by the Group and the Company are as follows:

Approximate Location land area Tenure Usage

No. 28 26,670 sq m 30 years from Bus depot Soon Lee Road 1 April 2000 Singapore (9 years 3 months unexpired)

Details of other leasehold buildings are as follows:

Approximate Location land area Tenure Usage

No. 550 52,187 sq m 43 years from Bus depot Bukit Batok Street 23 1 January 1983 Singapore (5 years unexpired)

No. 4 74,236 sq m 43 years from Bus depot Defu Ave 1 1 January 1983 Singapore (5 years 11 months unexpired)

No. 1470 62,220 sq m Under Temporary Bus depot Bedok North Ave 4 Occupation Licence Singapore

No. 2A 17,939 sq m Under Temporary Bus park Ayer Rajah Crescent Occupation Licence Singapore

No. 15 63,955 sq m 30 years 9 months from Bus depot Ang Mo Kio Street 63 1 March 1994 Singapore (3 years 11 months unexpired)

PG 150 SBS TRANSIT ANNUAL REPORT LTD 2020

11 VEHICLES, PREMISES AND EQUIPMENT (CONT’D)

(b) Right-of-use assets classified within vehicles, premises and equipment

The Group leases several leasehold land and buildings at an average lease term of 9 years (2019 : 9 years), where the Group make periodic payments which are used for its day to day bus operations. The Group’s obligations are secured by the lessors’ title to the leased assets for such leases.

Leasehold Bus Depots Land(N2) Total $’000 $’000 $’000

The Group and The Company

Cost: At 1 January 2019 118,516 – 118,516 Amount reclassified from vehicles, premises and equipment owned – 17,600 17,600 Additions 4,310 – 4,310 At 31 December 2019 122,826 17,600 140,426 Adjustments (869) – (869) At 31 December 2020 121,957 17,600 139,557

Accumulated depreciation: At 1 January 2019 40,478 – 40,478 Amount reclassified from vehicles, premises and equipment owned – 3,023 3,023 Depreciation 11,368 1,296 12,664 At 31 December 2019 51,846 4,319 56,165 Depreciation 11,761 1,296 13,057 At 31 December 2020 63,607 5,615 69,222

Carrying amount: At 31 December 2020 58,350 11,985 70,335

At 31 December 2019 70,980 13,281 84,261

Approximately one third of the leases for property expired in the current financial year (2019 : one third). The expired contracts were extended through exercising the extension options which were accounted for during the adoption of SFRS(I) 16.

(N2) : The Group has secured the right-of-use of leasehold land at Soon Lee bus depot with no future payments required. The Group’s leasehold land is stated at its revalued amount (Note 20) being the fair value at the date of revaluation based on valuation performed by an independent external valuer. The revaluation was done pursuant to the agreement in the Negotiated Contract under the BCM (Note 35). As at 31 December 2020, the carrying amount of the Group’s leasehold land would have been $5,546,000 (2019 : $6,140,000), had the leasehold land been carried at cost less accumulated depreciation.

PG PG 150 151 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

12 DEFERRED TAX ASSETS/LIABILITIES

The Group The Company 31 December 31 December 31 December 31 December 2020 2019 2020 2019 $’000 $’000 $’000 $’000

Deferred tax assets 26,695 21,540 – – Deferred tax liabilities (62,676) (74,940) (62,676) (74,940) Net (35,981) (53,400) (62,676) (74,940)

At beginning of year (53,400) (55,996) (74,940) (77,676) Credit to Profit or Loss (Note 26) 25,115 10,537 12,260 2,913 Utilisation of deferred tax assets under Group Relief Scheme: – SBS Transit DTL Pte. Ltd. (7,753) (7,542) – – Arising from movement in Other Comprehensive Income Statement 57 (399) 4 (177) At end of year (35,981) (53,400) (62,676) (74,940)

The balance comprises the tax effects of:

The Group The Company 31 December 31 December 31 December 31 December 2020 2019 2020 2019 $’000 $’000 $’000 $’000

Deferred tax assets

Unutilised tax losses 24,924 20,130 – – Excess of tax written down value over carrying amount 1,672 1,342 – – Other items 99 68 – – 26,695 21,540 – –

Deferred tax liabilities

Excess of carrying amount over tax written down value (78,967) (91,572) (78,967) (91,572) Other items 16,291 16,632 16,291 16,632 (62,676) (74,940) (62,676) (74,940)

Net deferred tax liabilities (35,981) (53,400) (62,676) (74,940)

PG 152 SBS TRANSIT ANNUAL REPORT LTD 2020

13 BORROWINGS

The Group and The Company 31 December 31 December 2020 2019 $’000 $’000

Unsecured borrowings at amortised cost

Bank Loans 25,000 75,000

Analysed as: Current 25,000 75,000 Non-current – – 25,000 75,000

The remaining unsecured bank loan of $25 million (2019 : $75 million) with a remaining tenure of 9 months (2019 :1 year) at the end of the reporting period is unsecured and bears a floating interest rate averaging 0.81% (2019 : fixed rate of 1.91%) per annum.

14 TRADE AND OTHER PAYABLES

The Group The Company 31 December 31 December 31 December 31 December 2020 2019 2020 2019 $’000 $’000 $’000 $’000

Payables to: Ultimate holding company (Note 4) 2,449 1,252 2,444 1,227 Related companies (Note 4) 4,237 4,252 4,173 4,153 Related parties (Note 4) 20 5 20 5 Outside parties 59,302 62,009 54,100 54,369 Accruals 181,375 187,533 150,730 157,345 Deferred income 2,715 2,815 2,328 2,285 Total 250,098 257,866 213,795 219,384

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs.

The amounts outstanding are interest-free and the average credit period is 30 days (2019 : 30 days).

PG PG 152 153 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

15 DEPOSITS RECEIVED

The Group The Company 31 December 31 December 31 December 31 December 2020 2019 2020 2019 $’000 $’000 $’000 $’000

Deposits received 9,733 10,178 8,253 8,470 Less: Due within 12 months (3,915) (3,560) (3,561) (2,917) Due after 12 months 5,818 6,618 4,692 5,553

Deposits received from tenants in respect of leases of stalls and shop lots, are repayable upon termination of the lease agreements. Deposits that are not expected to be repaid within the next 12 months after the end of the reporting period are presented as a non-current liability. The carrying amount of the deposits approximates their fair value.

16 DEFERRED GRANTS

The Group The Company 31 December 31 December 31 December 31 December 2020 2019 2020 2019 $’000 $’000 $’000 $’000

Deferred Grants 29,885 6,248 21,505 6,248

Analysed as: Current 24,042 – 15,662 – Non-current 5,843 6,248 5,843 6,248 29,885 6,248 21,505 6,248

Current deferred grants relate to the amounts granted to the Group and the Company under the COVID-19 Government Relief Measures, mainly the JSS initiative by the Singapore Government as disclosed in Note 22 (a) (ii). The initiative is intended to defray certain manpower costs.

Non-current deferred grants relate to capital grants.

PG 154 SBS TRANSIT ANNUAL REPORT LTD 2020

17 PROVISION FOR ACCIDENT CLAIMS

The Group and The Company 31 December 31 December 2020 2019 $’000 $’000

At beginning of year 21,205 19,533 Charge to Profit or Loss 2,980 7,400 Payments (4,555) (5,728) At end of year 19,630 21,205

The provision for accident claims represents the estimated amount which the Group will have to pay to outside parties for accident claims involving the Group Vehicles (Note 3 (a)).

18 PROVISION FOR SERVICE BENEFITS AND LONG SERVICE AWARDS

The Group The Company 31 December 31 December 31 December 31 December 2020 2019 2020 2019 $’000 $’000 $’000 $’000

At beginning of year 11,335 11,004 10,930 10,706 Charge to Profit or Loss 1,720 1,167 1,540 1,057 Payments (715) (836) (711) (833) At end of year 12,340 11,335 11,759 10,930

The balance comprises provision for: Retirement benefits 8,387 7,767 8,025 7,517 Long service awards 3,953 3,568 3,734 3,413 Total 12,340 11,335 11,759 10,930

PG PG 154 155 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

19 SHARE CAPITAL

The Group and The Company 31 December 31 December 31 December 31 December 2020 2019 2020 2019 Number (‘000) of ordinary shares $’000 $’000

Issued and paid up: At beginning of year 311,865 311,670 100,499 100,162 Exercise of share options – 195 – 337 At end of year 311,865 311,865 100,499 100,499

Fully paid ordinary shares, which have no par value, carry one vote per share and a right to dividends as and when declared by the Company.

Share options over ordinary shares granted under the employee share option plan

Share options of the Company were fully exercised in 2019 as set out in Note 22 (b).

The Company has one class of ordinary shares which carry no right to fixed income.

20 OTHER RESERVES

The Group The Company 31 December 31 December 31 December 31 December 2020 2019 2020 2019 $’000 $’000 $’000 $’000

Share option reserve: At beginning of year – 33 – 33 Transfer to share capital on exercise of share options – (28) – (28) Transfer to accumulated profits – (5) – (5) At end of year – – – –

Premises revaluation reserve: At beginning of year 40,265 40,265 40,265 40,265 At end of year 40,265 40,265 40,265 40,265

Hedging reserve: At beginning of year 278 (1,670) 20 (848) (Loss) Gain on cash flow hedges (278) 1,948 (20) 868 At end of year – 278 – 20

Total 40,265 40,543 40,265 40,285

PG 156 SBS TRANSIT ANNUAL REPORT LTD 2020

21 REVENUE

Revenue comprises the following amounts:

The Group 2020 2019 $’000 $’000

Transport services 1,097,702 1,283,695 Lease revenue 98,097 99,564 Other commercial services 35,148 61,962 Total 1,230,947 1,445,221

Revenue from transport services are mainly contracts with the Government (public sector) in Singapore for an average of 7 years. The Group derives the revenue that corresponds directly with the services rendered to the customers. Included in the revenue from transport services are performance incentives from transport regulator for achieving certain performance and service quality targets. These performance incentives accounted for approximately 5% (2019: 2%) of the total revenue.

22 STAFF COSTS

(a) Included in staff costs are:

(i) The remuneration of the Directors (executive and non-executive) and key executives comprised mainly short term benefits amounting to $2,905,162 (2019 : $2,929,990).

The Group 2020 2019 $’000 $’000

(ii) Cost of contribution to Central Provident Fund 58,196 57,386 Government grant (included in staff costs) (107,286) –

In 2020, the Group received wage support for local employees under JSS from the Singapore Government as part of the Government’s measures to support businesses during the period of economic uncertainty impacted by COVID-19. The Group assessed that there is reasonable assurance that it will comply with the conditions attached to the grants and the grants will be received. Grant income is recognised in profit or loss on a systematic basis over the period impacted by COVID-19 in which the related salary costs for which the grant is intended to compensate is recognised as expenses. The period impacted by COVID-19 has been determined to be 17 months commencing from April 2020. Government grant from JSS of $95,975,000 (Note 23) was recognised during the year.

PG PG 156 157 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

22 STAFF COSTS (CONT’D)

(b) Share-based payments

Share option scheme

The Company has a share option scheme for employees of the Group of the rank of Executive and above, and Directors of the Group. The scheme is administered by the Remuneration Committee. Information on the share option plan is disclosed in paragraph 4 to the Directors’ Statement. Options are exercisable at a subscription price determined with reference to the market price of the shares at the time of grant of the options. The vesting period is one year. If the options remain unexercised after a period of 10 years (5 years for non-executive Directors) from the date of the grant, the options expire. Options granted will lapse when the option holder ceases to be a full-time employee or Director of the Group, subject to certain exceptions at the discretion of the Remuneration Committee. The share option scheme expired on 8 June 2010 and hence no option has been granted since then.

The Company 2020 2019 Weighted Weighted average average Number of exercise Number of exercise share options price share options price $ $

Outstanding at beginning of year – – 232,500 1.58 Lapsed during the year – – (37,500) 1.58 Exercised during the year – – (195,000) 1.58 Outstanding at end of year – – – –

Exercisable at end of year – – – –

As at 31 December 2020, there were no outstanding options as all share options had been exercised or lapsed.

In 2019, the weighted average share price at the date of share options being exercised was $3.20.

PG 158 SBS TRANSIT ANNUAL REPORT LTD 2020

23 OPERATING PROFIT

In addition to the charges and credits disclosed elsewhere in the notes to the Financial Statements, this item includes the following charges (credits):

The Group 2020 2019 $’000 $’000

Directors’ fees 517 509 Cost of inventories recognised in repairs and maintenance costs 133,492 138,034 Net gain on disposal of vehicles and equipment (274) (76) Allowance for inventory obsolescence 20,159 1,887 Allowance for expected credit losses 395 – Provision for accident claims 2,980 7,400 Provision for service benefits and long service awards 1,720 1,167 Government grant 109,789 – Audit fees: Paid to auditors of the Company 116 122

Non-audit fees: Paid to auditors of the Company 87 37

Excluding the Government grant (COVID-19 related) of $109,789,000 (2019 : $NIL), the Group would have recorded Operating Loss of $29,806,000 (2019 : Operating Profit of $103,486,000).

24 NET INCOME FROM INVESTMENTS

The Group 2020 2019 $’000 $’000

Interest income from bank and short-term deposits 263 134 Interest income from net investment on sublease 9 3 Total 272 137

PG PG 158 159 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

25 FINANCE COSTS

The Group 2020 2019 $’000 $’000

Interest expense on lease liabilities 2,111 2,341 Interest expense on bank loans 1,136 1,908 Total 3,247 4,249

26 TAX (CREDIT) EXPENSE

The Group 2020 2019 $’000 $’000

Current taxation 23,166 28,623 Deferred tax (Note 12) (25,115) (10,537) Total (1,949) 18,086

The taxation charge varied from the amount of taxation charge determined by applying the Singapore income tax rate of 17% (2019 : 17%) to profit before taxation as a result of the following differences:

The Group 2020 2019 $’000 $’000

Profit before taxation 77,008 99,374

Taxation charge at statutory rate 13,091 16,894 (Non-taxable) allowable items (15,710) 897 Tax-exempt income (17) (17) Under provision of deferred tax in prior years 687 312 (1,949) 18,086

PG 160 SBS TRANSIT ANNUAL REPORT LTD 2020

27 EARNINGS PER SHARE

Earnings per share is calculated by dividing the Group’s net profit attributable to shareholders of the Company for the year by the weighted average number of ordinary shares in issue during the financial year as follows:

2020 2019

Profit attributable to shareholders of the Company ($’000) 78,957 81,288

Weighted average number of ordinary shares in issue (‘000) 311,865 311,825

Basic earnings per share (in cents) 25.32 26.07

Fully diluted earnings per share is the same as the basic earnings per share as there is no dilutive shares outstanding at the end of financial year ended 31 December 2020 and 31 December 2019.

28 BUSINESS SEGMENT INFORMATION

The Group operates principally in Singapore.

Following the developments in the public transport industry, the Group’s business segment information reported to the Group’s chief operating decision maker for purposes of resource allocation and assessment of segment performance are based on the following:

(a) Public Transport Services: Income is generated substantially from the provision of bus and rail services to commuters travelling on public transport systems.

(b) Other Commercial Services: Income is generated substantially through –

(i) advertisements on buses and trains and at bus interchanges and rail stations; and

(ii) rental collections from commercial and shop space at bus interchanges and rail stations.

Segment revenue and expense: Segment revenue and expense are the operating revenue and expense reported in the Group’s Profit or Loss that are directly attributable to a segment and the relevant portion of such revenue and expense that can be allocated on a reasonable basis to a segment.

Segment assets and liabilities: Segment assets include all operating assets used by a segment and consist principally of operating receivables, inventories and vehicles, premises and equipment, net of allowances and provisions. Capital additions include the total cost incurred to acquire vehicles, premises and equipment directly attributable to the segment. Segment liabilities include all operating liabilities and consist principally of accounts payable and accruals.

PG PG 160 161 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

28 BUSINESS SEGMENT INFORMATION (CONT’D)

Public Other Transport Commercial Services Services Total $’000 $’000 $’000

31 December 2020

REVENUE 1,195,799 35,148 1,230,947

RESULTS Segment results 56,872 23,111 79,983 Net income from investments 272 Finance costs (3,247) Profit before taxation 77,008 Tax credit 1,949 Profit after taxation 78,957

OTHER INFORMATION Additions of vehicles, premises and equipment 14,198 1,047 15,245 Depreciation expense 107,436 1,610 109,046

STATEMENT OF FINANCIAL POSITION

ASSETS Segment assets 1,008,330 20,615 1,028,945 Unallocated corporate assets 110,856 Consolidated total assets 1,139,801

LIABILITIES Segment liabilities 380,672 25,301 405,973 Unallocated corporate liabilities 146,802 Consolidated total liabilities 552,775

PG 162 SBS TRANSIT ANNUAL REPORT LTD 2020

28 BUSINESS SEGMENT INFORMATION (CONT’D)

Public Other Transport Commercial Services Services Total $’000 $’000 $’000

31 December 2019

REVENUE 1,383,259 61,962 1,445,221

RESULTS Segment results 61,948 41,538 103,486 Net income from investments 137 Finance costs (4,249) Profit before taxation 99,374 Taxation (18,086) Profit after taxation 81,288

OTHER INFORMATION Additions of vehicles, premises and equipment 30,243 1,368 31,611 Depreciation expense 102,521 1,549 104,070

STATEMENT OF FINANCIAL POSITION

ASSETS Segment assets 1,063,037 22,927 1,085,964 Unallocated corporate assets 51,321 Consolidated total assets 1,137,285

LIABILITIES Segment liabilities 386,918 28,995 415,913 Unallocated corporate liabilities 194,631 Consolidated total liabilities 610,544

PG PG 162 163 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

29 LEASE LIABILITIES

The Group as lessee

The Group 2020 2019 $’000 $’000

Maturity analysis: Within one year 14,009 13,485 In the second to fifth year inclusive 58,160 59,991 After five years 4,654 17,113 76,823 90,589 Less: Future finance charges (5,297) (7,413) 71,526 83,176

Analysed as: Current 12,215 11,375 Non-current 59,311 71,801 71,526 83,176

The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the Group’s treasury function.

The total cash outflow for leases (including short-term leases and leases of low value assets) amount to $11.3 million (2019: $10.2 million).

As at 31 December 2020, the Group is committed to $44,800 (2019 : $93,000) for leases exempted under SFRS(I) 16.

30 OPERATING LEASE ARRANGEMENTS

The Group as lessor

Operating leases, in which the Group is the lessor, relate to rental of spaces and floor areas at bus interchanges, bus depots and train stations. The properties are managed and maintained by the Group.

The Group The Company 2020 2019 2020 2019 $’000 $’000 $’000 $’000

Maturity analysis of operating lease payments: Within one year 16,801 16,876 13,413 13,941 In the second to fifth year inclusive 13,317 15,479 9,758 12,067 Total 30,118 32,355 23,171 26,008

PG 164 SBS TRANSIT ANNUAL REPORT LTD 2020

31 CAPITAL COMMITMENTS

As at 31 December 2020, the Group and the Company have the following capital commitments contracted for but not provided for in the Financial Statements:

The Group The Company 2020 2019 2020 2019 $’000 $’000 $’000 $’000

Purchase of vehicles, premises and equipment 25,257 31,847 24,026 29,819

32 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT

(a) Categories of financial instruments

The following table sets out the financial instruments as at the end of the reporting period:

The Group The Company 31 December 31 December 31 December 31 December 2020 2019 2020 2019 $’000 $’000 $’000 $’000

Financial assets

Amortised cost 358,919 253,172 647,336 504,342

Financial instruments designated in hedge accounting relationships:

Hedging instrument – 843 – 428

Financial liabilities

Amortised cost 263,922 317,067 226,454 277,084

Financial instruments designated in hedge accounting relationships:

Hedging instrument – 508 – 404

(b) Financial risk, management policies and objectives

The main areas of financial risk faced by the Group are foreign currency exchange rate risk, interest rate risk, credit risk, liquidity risk and fuel price risk. The Group recognises that management of financial risk is an important aspect in its drive towards creating shareholders’ value. It is the Group’s policy not to participate in speculative financial instruments. The Group oversees financial risk management and regularly reviews its policy governing risk management practices.

There has been no change to the Group’s exposure to these financial risks or the manner in which it manages and measures the risk.

PG PG 164 165 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

32 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (CONT’D)

(b) Financial risk, management policies and objectives (cont’d)

Foreign exchange rate risk management

The Group is exposed to currency risk as a result of its purchases of spare parts, fuel and any other purchases where the currency denomination differs from its functional currency (Singapore dollars). Its exposures include United States Dollar (“USD”), Swedish Kroner (“SEK”), Euro (“EUR”), Japanese Yen (“JPY”), Malaysian Ringgit (“MYR”) and Sterling Pound (“GBP”). The Group manages its foreign exchange exposure through active currency management using hedging instruments such as forwards and options where necessary.

Foreign currency sensitivity

Based on sensitivity analysis performed, the exposure to changes in foreign exchange rates is minimal and hence the resulting impact on profit or equity of the Group is insignificant.

Interest rate risk management

The Group’s primary interest rate risk relates to borrowings, investments in fixed income securities and deposits. The Group uses hedging instruments such as interest rate swaps and caps, where necessary, to achieve the desired interest rate profile in its effort to manage interest rate risk.

Summary quantitative data of the Group’s interest-bearing financial instruments are disclosed in Section (e) of this note.

Interest rate sensitivity

Based on sensitivity analysis performed at end of the reporting period, the exposure to changes in interest rates is minimal and hence the resulting impact on the profit or Other Comprehensive Income of the Group is insignificant.

Credit risk management

The Group has minimal credit risk arising from its public transport operations as the credit risk that arises from its public transport operations is mainly from LTA and commuters who use the contactless smart card where cash is collected upfront. The remaining credit risk from advertisement and rental revenue is controlled via upfront deposits or strict credit terms and regular monitoring of advertisers’ and tenants’ financial standing. The Group enters into treasury transactions only with creditworthy institutions. Its investments in fixed income instruments are above investment grade as assigned by international credit-rating agencies. Cash and deposits are kept with reputable financial institutions. There is no significant concentration of credit risk. In determining the recoverability of a receivable, the Group considers any change in the credit quality of the receivables from the date credit was initially granted up to the reporting date and expected credit losses as at end of the reporting period. To assess whether there is a significant increase in credit risk, the Group compares the risk of a default occurring on the asset as at the reporting date with the rate of default as at the date of initial recognition. It considers available reasonable and supportive forward-looking information, where relevant.

The carrying amount of financial assets represents the Group’s maximum exposure to credit risk as disclosed in the notes to the Financial Statements.

PG 166 SBS TRANSIT ANNUAL REPORT LTD 2020

32 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (CONT’D)

(b) Financial risk, management policies and objectives (cont’d)

Liquidity risk management

The Group regularly reviews its liquidity position comprising free cash flows from its operations and credit lines from banks to ensure its ability to access funding at any time at the best possible rates.

Fuel price risk management

Fuel, comprising diesel and electricity, is part of the operating cost of the Group. The Group seeks to hedge the price risk associated with its fuel needs and uses hedging instruments, where necessary, to achieve the desired hedge outcome.

Following the transition to the BCM, the fuel indexation in the contracts with LTA provides a natural hedge to the diesel price risk. In view of this, the fuel price risk faced by the Group relates mainly to electricity. Based on sensitivity analysis performed and taking into account the fuel hedges in place, as at end of the reporting period, every one percentage point change in the rates of electricity using the closing rates as at end of the reporting period as a basis will impact the Group’s annual electricity costs by $312,000 (2019 : $300,000). The sensitivity analysis assumes that consumption is held constant at the same level as in 2020.

Fair values of financial assets and financial liabilities

The carrying amounts of cash and cash equivalents, trade and other current receivables and payables, short term loans and other liabilities approximate the respective fair values due to the relatively short-term maturity of these financial instruments.

The fair values of other classes of financial assets and liabilities are disclosed in the respective notes to the Financial Statements.

The Group classifies fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

(i) quoted prices in active markets for identical assets or liabilities (Level 1);

(ii) inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (Level 2); and

(iii) inputs for the asset or liability that are not based on observable market data (Level 3).

The fair values of the Group’s investments are classified into Level 1. The Group’s hedging instruments are classified into Level 2. None of the fair value of the financial instrument is classified in Level 3. There are also no transfers between Levels 1 and 2 of the fair value hierarchy during the financial year.

PG PG 166 167 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

32 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (CONT’D)

(c) Hedging instruments

The Group The Company 31 December 31 December 31 December 31 December 2020 2019 2020 2019 $’000 $’000 $’000 $’000

Financial assets

At fair values: Fuel hedges – 843 – 428

Financial liabilities

At fair values: Foreign exchange hedges – 508 – 404

The Group utilises hedging instruments to hedge significant future transactions and cash flows.

The Group and the Company use fuel hedges contract to hedge against fuel price risks. These arrangements are designed to address fuel price exposure and are accounted for as cash flow hedges.

The Group and the Company use forward contracts and options to manage their exposure to foreign exchange risks. These arrangements are designed to address foreign exchange risk on future purchases of goods and are accounted for as cash flow hedges.

At the end of the reporting year, the Group and the Company has no outstanding fuel hedge (2019: $9,454,000).

At the end of the reporting year, the Group and the Company has no outstanding foreign exchange hedge (2019: $28,064,000).

The Group’s hedging instruments are measured at fair value whereby future cash flows are estimated based on contracted rates and observable forward rates at the end of the reporting period, discounted at a rate that reflects the credit risk of the various counterparties.

At the end of the prior period, the fair value of the Group and Company’s hedging instruments, based on market prices for equivalent instruments at the end of the reporting year, comprised $335,000 and $24,000 respectively of assets matched by an equivalent fair value adjustment on cash flow hedges in Other Comprehensive Income.

PG 168 SBS TRANSIT ANNUAL REPORT LTD 2020

32 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (CONT’D)

(d) Capital risk management policies and objectives

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance.

The Group’s capital management objectives are to safeguard its ability to continue as a going concern and to maximise shareholder value. Management monitors the gross and net gearing of the Group and its implication on weighted average cost of capital in deciding the optimal capital structure. These objectives determine the Group’s decisions on the amount of dividends to be paid to shareholders and the sources of capital to be raised, be it equity or debt. The Group’s debt capital refers to borrowings comprising loans under Note 13 while equity refers to total equity.

No changes were made in the objectives, policies or processes during the years ended 31 December 2020 and 2019.

(e) The following are the expected contractual undiscounted cash outflows (including interest payments) of the Group’s and the Company’s financial liabilities:

Contractual cash flows Within Effective Carrying Within 2 to 5 Beyond interest amount Total 1 year years 5 years rate $’000 $’000 $’000 $’000 $’000 %

2020

Short Term Bank Loans – Unsecured 25,000 25,050 25,050 – – 0.81

2019

Long Term Bank Loans – Unsecured 75,000 76,001 76,001 – – 1.91

33 DIVIDENDS

(a) During the financial year, the Company paid dividends as follows:

2020 2019 $’000 $’000

Tax-exempt one-tier final dividend in respect of the previous financial year: – 5.90 cents (2019 : 7.10 cents) per ordinary share 18,400 22,139

Tax-exempt one-tier interim dividend in respect of the current financial year: – NIL cents (2019 : 7.15 cents) per ordinary share – 22,298 Total 18,400 44,437

PG PG 168 169 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

33 DIVIDENDS (CONT’D)

(b) Subsequent to the end of the financial year, the Directors of the Company recommended that a tax-exempt one-tier first and final dividend of 6.30 cents per ordinary share totalling $19,647,000 (2019 : $18,400,000) be paid for the financial year ended 31 December 2020. The dividend is subject to approval by shareholders at the forthcoming Annual General Meeting and hence the proposed dividend has not been accrued as a liability for the current financial year.

During the financial year, no interim dividend was declared (2019: 7.15 cents per ordinary share). A first and final dividend of 6.30 cents per ordinary share has been proposed for the financial year ended 31 December 2020. Total distributions paid in respect of the financial year ended 31 December 2019 was 13.05 cents per ordinary share.

34 LICENCE FOR RAIL SERVICES

North-East MRT System, Punggol LRT System and Sengkang LRT System

With effect from 1 April 2018, the Company was granted a new licence to operate the Licensed Systems under the New Rail Financing Framework (“NRFF”) for a period of 15 years. If the Company applies for an extension, LTA may extend the term of the new licence for a further five years subject to terms and conditions as LTA may impose and the Company may accept.

The NRFF is an asset-light model whereby the LTA will make the capital investments in operating assets and thereby retain the ability and flexibility to decide on the additions, renewals and replacements and undertake long term planning for the rapid transit system network. It allows the LTA to respond more promptly to commuter needs, while relieving the Company of the cost of asset renewal and upgrade, and of procuring additional operating assets when ridership demand increases, in order to meet service level and reliability standards. The NRFF was first implemented in 2011 when the Company was awarded the tender for the Downtown Line.

With the transition to the NRFF, the Company will no longer need to buy over the first set of operating assets from the LTA. Going forward, LTA will also own and pay for the operating assets, including additions, renewals and replacements. In conjunction with the transition to the NRFF, the Company had entered into Sale and Purchase Agreements with the LTA on 14 February 2018 for the sale of certain operating assets required for the operation of the Licensed Systems which were purchased by the Company prior to the transition. The aggregate consideration for the sale was based on the respective net book values of such assets on the date of transfer amounted to $29,210,000.

In exchange for the right to operate, maintain and derive revenue from the Licensed Systems, the Company will pay an annual licence charge to the LTA over the licence period. The licence charge structure under the NRFF provides for some sharing between the Company and the LTA of revenue risks under the Fare Revenue Shortfall Sharing as well as profit sharing via an Earnings Before Interest and Tax Cap/Collar. These are explained below:

(i) Fare Revenue Shortfall Sharing (“FRSS”)

The licence charge structure has a FRSS mechanism which offers some level of protection against revenue risks arising from uncertainties in ridership and fares. Under this mechanism, if the actual revenue falls short of the target revenue by 2% to 6%, LTA will share 50% of the shortfall. If the shortfall between the actual revenue and the target revenue exceeds 6%, LTA will bear 75% of the incremental revenue shortfall beyond 6%.

PG 170 SBS TRANSIT ANNUAL REPORT LTD 2020

34 LICENCE FOR RAIL SERVICES (CONT’D)

(ii) Earnings Before Interest and Tax (“EBIT”) Cap / Collar

The licence charge structure provides for profit sharing via an EBIT cap and collar mechanism whereby LTA shares in the upside of the EBIT above the cap as well as the downside risks below the collar. If the EBIT margin is lower than 3.50%, LTA will share 50% of the shortfall. LTA’s sharing of the shortfall is limited by the amount of licence charge payable by the Company for the year. If the EBIT margin exceeds the cap of 5%, the excess will be shared via a tiered structure, whereby 85% to 95% of the incremental EBIT above the 5% cap will be shared with LTA.

LTA’s sharing under the FRSS and/or the EBIT Cap/Collar is limited by the amount of licence charge payable by the Company for the year.

In addition, the LTA may reimburse or be reimbursed by the Company when new regulatory changes initiated by LTA after the transition lead to changes in operating costs or revenue. Regulatory changes that may impact operating costs or revenue include modifications to operating performance standards for the rail lines, maintenance performance standards for the operating assets, key performance indicators or codes of practice and changes in rentable and advertising spaces available for generating non-fare revenue.

Downtown Line MRT System

A licence dated 19 December 2013 was issued by LTA to the subsidiary of the Company under which the subsidiary of the Company is licensed to operate the Downtown Line MRT System.

The licence sets out the conditions governing the operation of the Downtown Line MRT System and includes, among others, the following:

(a) The licence is for a period of 19 years commencing from 20 December 2013. LTA may, if it deems fit, renew the licence for such further period with revised terms and conditions of the renewed licence.

(b) The licence fee payable to LTA is prescribed under the subsidiary legislation of the Rapid Transit Systems Act during the Licence Term.

(c) The subsidiary of the Company shall pay LTA a licence charge which consists of Fixed Charge and Revenue Share Charge. A yearly Fixed Charge is payable from financial year 2019 to end of licence period. If the Operating Surplus minus the Fixed Charge for a financial year is more than the Threshold Profit, the subsidiary of the Company shall pay Revenue Share Charge.

(d) After the commencement of revenue service of the last stage, the subsidiary of the Company shall pay LTA a Cash-Bid Amount if the Net Operating Surplus for a financial year is more than the Threshold Profit.

(e) All Operating Assets shall remain the property of LTA except for Spares, Special Tools, Non-Proprietary Items and End Devices purchased by the subsidiary of the Company during the Licence Term.

PG PG 170 171 SBS TRANSIT LTD

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020

35 CONTRACTS UNDER THE BUS CONTRACTING MODEL (“BCM”)

The Company entered into public bus services contracts (collectively known as the “Negotiated Contract”) with LTA for the operation of public bus services under the BCM. The Negotiated Contract was effective from 1 September 2016 following the expiry of the Bus Service Operating Licence on 31 August 2016. Under the Negotiated Contract, the Company operates a total of 8 bus packages with an average contract period of 7 years. The respective contracted expiry dates of the 8 bus packages (subject to any further extension that may be granted at the sole discretion of LTA) are as follows: Bukit Merah (2018), Sengkang-Hougang (2021), Bedok (2023), Jurong West (2024), Tampines (2024), Serangoon-Eunos (2025), Clementi (2025) and Bishan-Toa Payoh (2026).

As part of the Negotiated Contract, the Company leases its fleet of close to 2,900 buses to LTA. In consideration of the Company using its fleet for the provision of the bus services, LTA pays a leasing fee based on the depreciation of the buses over the statutory lifespan. LTA also pays a leasing fee for the use of the other existing assets of the Company (bus depot and related equipment) based on the depreciation of such assets.

Subsequent to the Negotiated Contract, the Company was awarded the Seletar Bus Package in April 2017 and the Bukit Merah Bus Package (the first among the 8 bus packages within the Negotiated Contract to expire) in February 2018 respectively through the tender process conducted by LTA. Both bus packages secured through the tender process have a contract period of five years which can be extended by another two years. The Seletar and Bukit Merah Bus Packages had commenced operations from March 2018 and November 2018 respectively.

Including the two bus packages secured through tender, the Company operates a total of 9 bus packages which cover a total of 226 bus services, 7 bus depots, 1 bus park, 17 bus interchanges and 14 bus terminals. The fleet size required to operate the 9 packages is around 3,500 buses.

Under the BCM, LTA retains all fare revenue collected from the provision of the bus services. Revenue for the Company is derived from the provision of bus services which comprises service fee and leasing fee. The service fee is indexed to changes in wage levels, inflation and fuel costs. In addition, the Company retains revenue from other commercial services comprising advertising and rental.

In addition to operating and managing bus services to specified performance standards, the Company’s responsibilities include the following:

(a) Operate, manage and maintain the buses and their on-board equipment;

(b) Operate, and maintain the bus interchanges, bus depots including the equipment and systems therein;

(c) Charge and collect fares as approved by the Public Transport Council, on behalf of LTA, for travel on the bus services;

(d) Provide bus service information at all bus stops and bus interchanges served by the bus services; and

(e) Provide customer management services, such as lost and found service, and a hotline for commuter feedback and enquiries.

36 CONTINGENT EVENT

13 Bus Captains commenced legal proceedings against the Company between 20 September 2019 and 1 March 2020 in relation to, inter alia, working hours, rest days, overtime pay and allowances. At the date of this report, the Company is in the midst of legal proceedings. As at 31 December 2020, Management is of the view that no provision is required with regard to the above.

PG 172 SBS TRANSIT 172 LTD PG Source: Bloomberg Finance L.P. INDEX (FSTM) COMPARISON OFPERFORMANCE OFSBSTRANSIT’SSHARE PRICESTRAITS TIMESMIDCAP ANDTHEFTSE SBS TRANSIT’SSHARE PRICE MOVEMENT ANDVOLUME TURNOVER SHARE PRICEMOVEMENT CHART Jan Jan Feb Feb Mar Mar Apr Apr SBS Transit May May Jun Jun 2020 2020 ANNUAL REPORT 173 FTSE Straits TimesMidCapIndex(FSTM) 2020 Jul Jul PG Aug Aug Sep Sep Oct Oct Nov Nov Dec Dec -30 -25 -20 -15 -10 -5 0 -35 1.5 2.60 2.80 3.00 3.20 3.40 3.60 4.00 0.5 1.0 0 3.05

Percentage Volume (mil) Share Price ($) SBS TRANSIT LTD

SHAREHOLDINGS STATISTICS AS AT 1 MARCH 2021

Issued and Fully Paid-Up Capital : S$100,498,983 No. of Shares Issued : 311,864,766 Class of Shares : Ordinary Shares Voting Rights : One (1) Vote Per Share The Company does not hold any Treasury Shares and Subsidiary Holdings.

DISTRIBUTION OF SHAREHOLDERS BY SIZE OF SHAREHOLDINGS AS AT 1 MARCH 2021

No. of Size of Shareholdings Shareholders % No. of Shares %

1 – 99 26 0.13 621 0.00 100 – 1,000 4,189 21.15 2,634,145 0.85 1,001 – 10,000 15,037 75.93 28,139,872 9.02 10,001 – 1,000,000 541 2.73 20,424,226 6.55 1,000,000 & Above 12 0.06 260,665,902 83.58 TOTAL 19,805 100.00 311,864,766 100.00

LIST OF TWENTY (20) LARGEST SHAREHOLDERS (As recorded in the Depository Register as at 1 March 2021)

Name of Shareholder No. of Shares % (1)

1 COMFORTDELGRO CORPORATION LIMITED 232,125,512 74.43 2 DBS NOMINEES PTE LTD 8,950,505 2.87 3 RAFFLES NOMINEES (PTE) LIMITED 3,974,724 1.27 4 CITIBANK NOMINEES SINGAPORE PTE LTD 3,433,643 1.10 5 UNITED OVERSEAS BANK NOMINEES PTE LTD 2,215,500 0.71 6 BPSS NOMINEES SINGAPORE (PTE.) LTD. 1,905,500 0.61 7 OCBC NOMINEES SINGAPORE PTE LTD 1,715,900 0.55 8 MAYBANK KIM ENG SECURITIES PTE.LTD 1,568,100 0.50 9 CGS-CIMB SECURITIES (SINGAPORE) PTE LTD 1,379,773 0.44 10 ABN AMRO CLEARING BANK N.V. 1,187,000 0.38 11 THAM KIM FAY OR KWA AI TEE JEANNE 1,176,800 0.38 12 HSBC (SINGAPORE) NOMINEES PTE LTD 1,032,945 0.33 13 PHILLIP SECURITIES PTE LTD 865,400 0.28 14 IFAST FINANCIAL PTE LTD 746,500 0.24 15 CHANGI BUS COMPANY (PRIVATE) LIMITED 691,548 0.22 16 TAN KUANGXU 439,000 0.14 17 PANG CHEOW JOW 400,000 0.13 18 UOB KAY HIAN PTE LTD 363,400 0.12 19 JUSIN PRIVATE LIMITED 300,000 0.10 20 LEE WEI SHENG OR LAW HUI MIN (LIU HUIMIN) 300,000 0.10 TOTAL: 264,771,750 84.90

Notes: (1) The percentage of shareholding is calculated based on 311,864,766 issued shares of the Company as at 1 March 2021.

PG 174 SBS TRANSIT ANNUAL REPORT LTD 2020

SUBSTANTIAL SHAREHOLDERS (As recorded in the Register of Substantial Shareholder as at 1 March 2021)

Direct Interest Deemed Interest No. of Shares %(1) No. of Shares %(1)

COMFORTDELGRO CORPORATION LIMITED 232,125,512 74.43 – –

Notes: (1) The percentage is calculated based on 311,864,766 issued shares of the Company as at 1 March 2021.

COMPLIANCE WITH RULE 723 OF THE SINGAPORE EXCHANGE SECURITIES TRADING LIMITED (“SGX-ST”) LISTING MANUAL

Based on information available and to the best knowledge of the Company as at 1 March 2021, approximately 25.53% of the ordinary shares of the Company are held by the public. Accordingly, the Company has complied with Rule 723 of the Listing Manual of the SGX-ST.

PG PG 174 175 SBS TRANSIT LTD

NOTICE OF ANNUAL GENERAL MEETING

SBS TRANSIT LTD (Incorporated in the Republic of Singapore) (Co. Reg. No.: 199206653M)

NOTICE IS HEREBY GIVEN that the Twenty-Eighth Annual General Meeting (the “AGM”) of SBS Transit Ltd. (the “Company”) will be held on Thursday, 29 April 2021 at 10.00 a.m. via electronic means and at:

AUDITORIUM COMFORTDELGRO HEADQUARTERS 205 BRADDELL ROAD SINGAPORE 579701

The AGM is for the purpose of transacting the following business:

ORDINARY BUSINESS:

To consider and, if thought fit, to pass the following Resolutions:

1. To receive and adopt the Directors’ Statement and Audited Financial Statements for the Financial (Resolution 1) Year ended 31 December 2020 together with the Auditors’ Report thereon.

2. To declare a tax-exempt one-tier final dividend of 6.30 cents per ordinary share in respect of the (Resolution 2) Financial Year ended 31 December 2020.

3. To approve the payment of Directors’ fees of $517,465 for the Financial Year ended (Resolution 3) 31 December 2020. (FY2019: $508,737)

4. To re-elect Professor Lim Seh Chun as a director on the following terms: (Resolution 4)

• Professor Lim is an Independent Non-Executive Director who is retiring pursuant to Regulation 100 of the Company’s Constitution and, being eligible, has offered himself up for re-election. He will cease to be designated as independent as of 1 January 2022 in accordance with Rule 210(5)(d)(iii) of the Listing Manual of the SGX-ST (which will come into effect on 1 January 2022), unless both Resolution 4 and 5 are passed.

• If both Resolution 4 and Resolution 5 are passed, Professor Lim shall continue to be designated as an Independent Non-Executive Director from 1 January 2022 and for the duration specified in Resolution 5.

• If only Resolution 4 is passed but Resolution 5 is not passed, Professor Lim shall continue to be designated as an Independent Non-Executive Director up to and including 31 December 2021 and shall thereafter be re-designated as a Non-Independent Non-Executive Director as of and from 1 January 2022. [Please refer to Explanatory Note (a)]

PG 176 SBS TRANSIT ANNUAL REPORT LTD 2020

5. Subject to and contingent upon Resolution 4 being passed, pursuant to Rule 210(5)(d)(iii)(B) of (Resolution 5) the Listing Manual of the SGX-ST (which will come into effect on 1 January 2022), to re-elect Professor Lim Seh Chun as an Independent Non-Executive Director on the following terms:

• If passed, this Resolution shall remain in force until Professor Lim’s retirement or resignation as director, or the conclusion of the annual general meeting of the Company in 2024, whichever is the earliest.

• For the purposes of this Resolution, the Directors and the Chief Executive Officer of the Company and their respective associates (as defined in the Listing Manual of the SGX-ST): (i) shall abstain from voting; and (ii) must not accept appointment as proxies unless specific instructions as to voting are given. Any votes cast by such persons in contravention of the foregoing shall be disregarded for the purposes of determining if this Resolution has been passed in accordance with Rule 210(5)(d)(iii)(B) of the Listing Manual of the SGX-ST. [Please refer to Explanatory Note (a)]

6. To note the retirement of Mr Lim Jit Poh as Director of the Company upon the conclusion of this AGM. [Please refer to Explanatory Note (b)]

7. To note the retirement of Mr John De Payva as a Director of the Company upon conclusion of this AGM. [Please refer to Explanatory Note (c)]

8. To note the retirement of Mr Lim Siang Hoe, Benny as a Director of the Company upon conclusion of this AGM. [Please refer to Explanatory Note (d)]

9. To re-appoint Messrs Deloitte & Touche LLP as Auditors and authorise the Directors to fix their (Resolution 6) Remuneration.

SPECIAL BUSINESS:

To consider and, if thought fit, to pass the following Resolutions:

ORDINARY RESOLUTIONS:

10. EXECUTIVE SHARE SCHEME (Resolution 7)

That:

(a) a new share award scheme to be known as the “SBS Executive Share Scheme” (the “Scheme”), under which awards (“Awards”) of fully-paid shares will be granted, free of charge, to eligible participants under the Scheme, the rules and summary details of which are set out in the circular dated 25 March 2021 (“Circular”), be and is hereby approved and adopted with effect from the date of the passing of this Resolution;

PG PG 176 177 SBS TRANSIT LTD

NOTICE OF ANNUAL GENERAL MEETING

(b) the directors of the Company (“Directors”) be and are hereby authorised to:

(i) establish and administer the Scheme; and

(ii) modify and/or alter the Scheme at any time and from time to time, provided that such modifications and/or alterations are effected in accordance with the provisions of the Scheme, and do all such acts and to enter into all such transactions and arrangements as may be necessary or expedient in order to give full effect to the Scheme; and

(c) the Directors be and are hereby authorised to grant Awards in accordance with the provisions of the Scheme and to issue and/or transfer from time to time such number of fully paid-up shares in the capital of the Company (“Shares”) as may be required to be issued and/or transferred pursuant to the vesting of Awards under the Scheme, provided that:

(i) the total number of new Shares which shall be issued pursuant to Awards granted under the Scheme shall not exceed five per cent (5%) of the total number of issued Shares (excluding treasury shares and subsidiary holdings) on the day preceding the relevant date of the Award; and

(ii) the aggregate number of Shares for which an Award may be granted on any date under the Scheme, when added to the aggregate number of Shares that are issued and/or issuable in respect of:

(A) all Awards granted under the Scheme; and

(B) all Shares, options or awards granted under any other share option or share scheme of the Company then in force (if any),

shall be subject to any applicable limits prescribed under the Listing Manual of the Singapore Exchange Securities Trading Limited (the “SGX-ST”) (“Listing Manual”). [Please refer to Explanatory Note (e)]

11. SHARE BUYBACK MANDATE (Resolution 8)

That:

(a) for the purposes of the Companies Act (Chapter 50 of Singapore) (the “Companies Act”), the authority conferred on the Directors to exercise all the powers of the Company to purchase or otherwise acquire Shares not exceeding in aggregate the Maximum Limit (as hereinafter defined) at such price(s) as may be determined by the Directors from time to time up to the Maximum Price (as hereafter defined), whether by way of:

(i) on-market purchases (“Market Purchases”), effected on the SGX-ST or, as the case may be, any other stock exchange on which the Shares may for the time being be listed and quoted, through one or more duly licensed stockbrokers appointed by the Company for the purpose; and/or

(ii) off-market purchases (“Off-Market Purchases”) (if effected otherwise than on the SGX-ST) in accordance with any equal access scheme or schemes as defined in Section 76C of the Companies Act,

PG 178 SBS TRANSIT ANNUAL REPORT LTD 2020

and otherwise in accordance with all other laws and regulations, including but not limited to the provisions of Companies Act and the Listing Manual as may for the time being be applicable, be and is hereby approved generally and unconditionally (the “Share Buyback Mandate”);

(b) unless varied or revoked by the Company in a general meeting, the authority conferred on the Directors pursuant to the Share Buyback Mandate may be exercised by the Directors at any time and from time to time during the period commencing from the date of the passing of this Resolution and expiring on the earlier of:

(i) the date on which the next AGM is held or required to be held by law to be held; and

(ii) the date on which the purchases or acquisitions of Shares by the Company pursuant to the Share Buyback Mandate are carried out to the full extent mandated;

(c) in this Resolution:

“Maximum Limit” means that number of Shares representing not more than ten per cent (10%) of the total number of issued Shares (excluding treasury shares and subsidiary holdings) as at the date of the passing of this Resolution, unless the Company has effected a reduction of the share capital of the Company in accordance with the applicable provisions of the Companies Act, at any time during the Relevant Period, in which event the total number of issued Shares shall be taken to be the total number of issued Shares as altered (excluding any treasury shares and subsidiary holdings); and

“Maximum Price”, in relation to a Share to be purchased or acquired, means the purchase price (excluding related expenses) which shall not exceed:

(i) in the case of a Market Purchase, one hundred and five per cent (105%) of the Average Closing Price; and

(ii) in the case of an Off-Market Purchase pursuant to an equal access scheme, one hundred and twenty per cent (120%) of the Average Closing Price,

where:

“Relevant Period” means the period commencing from the date on which this Resolution is passed and expiring on the date the next AGM is held or required by law to be held, whichever is earlier, after the date of this Resolution;

“Average Closing Price” means the average of the closing market prices of a Share traded on the SGX-ST over the last five (5) Market Days (a “Market Day” being a day on which the SGX-ST is open for trading in securities), on which transactions in the Shares were recorded, immediately preceding the day of the Market Purchase by the Company or, as the case may be, the day of the making of the offer pursuant to the Off-Market Purchase, and deemed to be adjusted for any corporate action that occurs after the relevant five-day period; and

PG PG 178 179 SBS TRANSIT LTD

NOTICE OF ANNUAL GENERAL MEETING

“Day of the making of the offer” means the day on which the Company announces its intention to make an offer for the purchase of Shares from shareholders of the Company, stating the purchase price (which shall not be more than the Maximum Price calculated on on the foregoing basis) for each Share and the relevant terms of the equal access scheme for effecting the Off-Market Purchase; and

(d) the Directors and/or any of them be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) as they and/or he may consider necessary, expedient, incidental or in the interests of the Company to give effect to the transactions contemplated and/or authorised by this Resolution. [Please refer to Explanatory Note (f)]

RECORD AND DIVIDEND PAYMENT DATES

NOTICE IS ALSO HEREBY GIVEN that the Transfer Books and Register of Members of the Company will be closed on 7 May 2021, at 5 p.m. for the purposes of determining Shareholders’ entitlements to the proposed tax-exempt one-tier final dividend of 6.30 cents per ordinary share for the Financial Year ended 31 December 2020.

Duly completed and stamped transfers received by the Company’s Share Registrar, B.A.C.S. Private Limited, 8, Robinson Road, #03-00 ASO Building, Singapore 048544 up to 5.00 p.m. on 7 May 2021 will be registered to determine Shareholders’ entitlements to the final dividend. Shareholders (being depositors) whose securities accounts with The Central Depository (Pte) Limited are credited with ordinary shares in the capital of the Company as at 5.00 p.m. on 7 May 2021 will be entitled for the proposed final dividend.

The final dividend, if approved by the Shareholders at the Twenty-Eighth Annual General Meeting of the Company, will be paid on 19 May 2021.

BY ORDER OF THE BOARD

Angeline Joyce Lee Siang Pohr Joint Company Secretary Singapore

25 March 2021

PG 180 SBS TRANSIT ANNUAL REPORT LTD 2020

NOTES:

General

1. Pursuant to the COVID-19 (Temporary Measures) (Alternative arrangements for Meetings for Companies, Variable Capital Companies, Business Trust, Unit Trust and Debenture Holders) Order 2020 (the “Order”), the Company is permitted to hold physical meetings with strict adherence to safe management measures. The AGM will be held both physically at 205 Braddell Road, Singapore 579701 and by way of electronic means.

2. Alternative arrangements relating to attendance at the AGM, submission of questions to the Chairman of the Meeting in advance of the AGM, addressing of substantial and relevant questions at the AGM and voting by appointing the Chairman of the Meeting as proxy at the AGM are set out in this Notice of AGM. This Notice of AGM may also be accessed at the Company’s website at www.sbstransit.com.sg and will also be made available on SGXNET.

Pre-registration

1. To minimise physical interactions and COVID-19 transmission risk, the number of shareholders allowed to attend the AGM in person will be kept at 25. Shareholders who wish to attend the AGM in person or virtually via webcast should pre-register at www.conveneagm.sg/SBS_AGM2021 by 10.00 am on Monday, 26 April 2021 to enable the Company to verify their status as shareholders.

2. Following the verification, confirmed shareholders will receive an email by Tuesday, 27 April 2021, notifying if they will be able to attend the AGM in person, or virtually using the account credentials created during pre-registration. Please do not disclose your login details to any other persons who are not entitled to attend the AGM. Your presence via the live webcast shall be taken as attendance at the AGM.

3. Shareholders who hold their shares through relevant intermediaries, including CPF and SRS investors, who wish to participate in the AGM via the live webcast should approach their respective relevant intermediaries (which would include, in the case of CPF and SRS investors, their respective CPF Agent Banks and SRS Operators) through which they hold such shares as soon as possible in order for the necessary arrangements to be made for their participation in the AGM.

Submission of questions

1. Shareholders who wish to ask questions relating to the resolutions to be tabled for approval at the AGM must do so in advance via signing in to the pre-registration site. Alternatively, shareholders may email their questions in advance to IR@comfortdelgro.com, together with their full name and NRIC/FIN/Company Registration Number, whichever is applicable.

2. All questions must be submitted by 10.00 am on Monday, 26 April 2021.

PG PG 180 181 SBS TRANSIT LTD

NOTICE OF ANNUAL GENERAL MEETING

Voting

1. Shareholders (whether individual or corporate), either attending in person or via the live webcast, must appoint the Chairman of the Meeting as his/her/its proxy to attend and vote on his/her/its behalf at the AGM if such shareholder wishes to exercise his/her/its voting rights at the AGM.

2. Where a shareholder (whether individual or corporate) appoints the Chairman of the Meeting as his/her/its proxy, he/she/it must give specific instructions as to voting, or abstentions from voting, in respect of a resolution in the form of proxy, failing which the appointment of the Chairman of the Meeting as proxy for that resolution will be treated as invalid.

3. CPF or SRS investors who wish to appoint the Chairman of the Meeting as proxy should approach their respective CPF or SRS approved nominees to submit their votes not less than 7 working days before the AGM by 10.00 am on Tuesday, 20 April 2021.

4. The proxy form for the AGM may be accessed at the Company’s website at www.sbstransit.com.sg/agm2021 proxyform, and on SGXNET. The electronic proxy form is also available on the Company’s AGM pre-registration site, www.conveneagm.sg/SBS_AGM2021.

5. The proxy form must be submitted in the following manner:

a. If submit by post, be deposited at the Company’s registered office at 205 Braddell Road, Singapore 579701; or

b. If submitted by electronic mail, be sent to [email protected]; or

c. If submitted electronically, be lodged at the Company’s AGM pre-registration site, www.conveneagm.sg/SBS_ AGM2021.

in either case, by 10.00 am on Monday, 26 April 2021

6. The instrument appointing the Chairman of the meeting as proxy must be executed under the hand of the appointor or of his/her attorney duly authorised in writing. Where the instrument appointing the Chairman as proxy is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer.

7. Shareholders will not be able to vote through the live webcast and can only vote via their proxy forms which are required to be submitted in accordance with the foregoing paragraphs.

Annual Report and other documents

The Annual Report for the financial year ended 31 December 2020 and the Circular dated 25 March 2021 in relation to the proposed adoption of the SBS Executive Share Scheme and the proposed adoption of the Share Buy Back Mandate have been uploaded on SGXNET on 25 March 2021 and may be accessed via SGXNET and also the Company’s website at www.sbstransit.com.sg.

PG 182 SBS TRANSIT ANNUAL REPORT LTD 2020

PERSONAL DATA PRIVACY:

By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the Annual General Meeting and/or any adjournment thereof, a member of the Company (i) consents to the collection, use and disclosure of the member’s personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the Annual General Meeting (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the Annual General Meeting (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”), (ii) warrants that where the member discloses the personal data of the member’s proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies)and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the member will indemnify the Company in respect of any actions, proceedings, penalties, liabilities, claims, demands, costs, expenses, losses and damages suffered or incurred by the Company as a result of the member’s breach of warranty.

EXPLANATORY NOTES:

ORDINARY BUSINESS:

(a) Ordinary Resolution 4 and Ordinary Resolution 5 relate to Professor Lim Seh Chun’s(1) re-election as a director of the Company and his continued designation as an Independent Non-Executive Director. As of 1 January 2022, Professor Lim would have been a Director of the Company for an aggregate period of more than 9 years and will cease to be regarded as independent on such date pursuant to Rule 210(5)(d)(iii) of the Listing Manual of the SGX-ST (which will come into effect on 1 January 2022), unless Resolution 4 and Resolution 5 are both passed.

If Resolution 4 and Resolution 5 are both passed, Professor Lim will continue to be designated as an Independent Non-Executive Director of the Company for the duration specified in Resolution 5.

If only Resolution 4 is passed but Resolution 5 is not passed, Professor Lim shall continue to be designated as an Independent Non-Executive Director of the Company up to and including 31 December 2021, and shall thereafter be re-designated as a Non-Independent Non-Executive Director as of and from 1 January 2022.

If Resolution 4 is not passed, Resolution 5 will not be put to the vote at the Annual General Meeting in the interest of efficiency.

The Nominating Committee and the Board have determined that Professor Lim Seh Chun has remained objective and independent in Board deliberations. His vast experience enables him to provide the Board and the various Board Committees on which he has been serving, with pertinent experience and competence to facilitate sound decision making. His length of service does not in any way interfere with his exercise of independent judgement nor hinder his ability to act in the best interest of the Company. The Board is of the view that Professor Lim Seh Chun is able to continue to discharge his duties independently with integrity and competence.

(b) Mr Lim Jit Poh will, upon his retirement as a Director of the Company, cease to be Chairman of the Board and the SBS Tender Committee, and a member of the Nominating Committee and the Remuneration Committee.

PG PG 182 183 SBS TRANSIT LTD

NOTICE OF ANNUAL GENERAL MEETING

(c) Mr John De Payva will, upon his retirement as a Director of the Company, cease to be a member of the Remuneration Committee and the Service Quality Committee.

(d) Mr Lim Siang Hoe, Benny will, upon his retirement as a Director of the Company, cease to be a member of the Audit and Risk Committee and the Nominating Committee.

(1) Detailed information on the Director who are proposed to be re-elected can be found under the sections entitled “Board of Directors”, “Directors’ Particulars” and “Additional Information on Directors Seeking Re-election” in the 2020 Annual Report of the Company.

SPECIAL BUSINESS:

(e) Ordinary Resolution 7, if passed, will adopt the Scheme in the manner as set out in the Circular. The Company therefore wishes to adopt the Scheme, subject to, and upon, approval of shareholders being obtained for the Scheme at this AGM. The rationale for the adoption of the Scheme, details of and a summary of the principal rules of the Scheme are set out in the Circular.

(f) Ordinary Resolution 8, if passed, will empower the Directors to exercise all powers of the Company to purchase or otherwise acquire (whether by way of market purchases or off-market purchases) Shares on the terms of the Share Buyback Mandate as set out in the Circular.

The Company may use internal sources of funds to finance its purchases or acquisitions of Shares. The Directors do not propose to exercise the Share Buyback Mandate to such extent that it would result in any material adverse effect on the listing status of the Shares on the SGX-ST, liquidity and/or the orderly trading of the Shares and/or the financial position of the Group. The amount of financing required for the Company to purchase its Shares pursuant to the Share Buyback Mandate and the impact on the Company’s financial position, cannot be realistically ascertained as at the date of this Notice as this will depend on factors such as the aggregate number of Shares purchased and the purchase prices paid at the relevant times.

An illustration of the financial impact of the purchase or acquisitions of Shares by the Company pursuant to the Share Buyback Mandate on the Audited Financial Statements of the Group for the Financial Year ended 31 December 2020 is set out in the Circular.

As the COVID-19 situation continues to evolve, the Company will closely monitor the situation and reserves the right to take further measures as appropriate at short notice up to the day of the AGM.

Shareholders are advised to closely monitor announcements made by the Company on SGXNET.

PG 184 SBS TRANSIT ANNUAL REPORT LTD 2020

ADDITIONAL INFORMATION ON DIRECTOR SEEKING RE-ELECTION

The following additional information on Professor Lim Seh Chun who is seeking re-election as Director of the Company at the 28th Annual General Meeting to be held on 29 April 2021, is to be read in conjunction with his biography on page 55.

LIM SEH CHUN (Lead Independent Non-Executive Director)

Country of principal residence Singapore

The Board’s comments on this appointment Prof Lim is an expert in mechanical engineering. He understands the Group’s challenges within the volatile and complex global economic landscape and will continue to enhance Board deliberations and help Management progress with its growth vision.

Working experience and occupations(s) during the past Current Directorships: 10 years 1. SBS Transit Ltd*

Directorship of other Non-listed Company:

1. Singapore School of Science and Technology, Chairman, Board of Directors.

Current Principal Commitments:

1. Singapore University of Technology and Design (SUTD) – Associate Provost for Student Affairs (2014 – till present)

Past 10 years Directorships:

Nil

Shareholding interest in the listed issuer and its No subsidiaries

Any relationship (including immediate family No relationships) with any existing director, existing executive officer, the issuer and/or substantial shareholder of the listed issuer or of any of its principal subsidiaries

Conflict of interest (including any competing business) No

Undertaking (in the format set out in Appendix 7.7) Yes under Rule 720(1) has been submitted to the listed issuer (Yes or No)

* Listed Company

PG PG 184 185 SBS TRANSIT LTD

ADDITIONAL INFORMATION ON DIRECTOR SEEKING RE-ELECTION

LIM SEH CHUN (Lead Independent Non-Executive Director)

(a) Whether at any time during the last 10 years, an No application or a petition under any bankruptcy law of any jurisdiction was filed against him or against a partnership of which he was a partner at the time when he was a partner or at any time within 2 years from the date he ceased to be a partner?

(b) Whether at any time during the last 10 years, an No application or a petition under any law of any jurisdiction was filed against an entity (not being a partnership) of which he was a director or an equivalent person or a key executive, at the time when he was a director or an equivalent person or a key executive of that entity or at any time within 2 years from the date he ceased to be a director or an equivalent person or a key executive of that entity, for the winding up or dissolution of that entity or, where that entity is the trustee of a business trust, that business trust, on the ground of insolvency?

(c) Whether there is any unsatisfied judgment against No him?

(d) Whether he has ever been convicted of any No offence, in Singapore or elsewhere, involving fraud or dishonesty which is punishable with imprisonment, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such purpose?

(e) Whether he has ever been convicted of any No offence, in Singapore or elsewhere, involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or has been the subject of any criminal proceedings (including any pending criminal proceedings of which he is aware) for such breach?

(f) Whether at any time during the last 10 years, No judgment has been entered against him in any civil proceedings in Singapore or elsewhere involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or a finding of fraud, misrepresentation or dishonesty on his part, or he has been the subject of any civil proceedings (including any pending civil proceedings of which he is aware) involving an allegation of fraud, misrepresentation or dishonesty on his part?

PG 186 SBS TRANSIT ANNUAL REPORT LTD 2020

LIM SEH CHUN (Lead Independent Non-Executive Director)

(g) Whether he has ever been convicted in Singapore No or elsewhere of any offence in connection with the formation or management of any entity or business trust?

(h) Whether he has ever been disqualified from acting No as a director or an equivalent person of any entity (including the trustee of a business trust), or from taking part directly or indirectly in the management of any entity or business trust?

(i) Whether he has ever been the subject of any No order, judgment or ruling of any court, tribunal or governmental body, permanently or temporarily enjoining him from engaging in any type of business practice or activity?

(j) Whether he has ever, to his knowledge, been No concerned with the management or conduct, in Singapore or elsewhere, of the affairs of :-

(i) any corporation which has been investigated for a breach of any law or regulatory requirement governing corporations in Singapore or elsewhere; or

(ii) any entity (not being a corporation) which has been investigated for a breach of any law or regulatory requirement governing such entities in Singapore or elsewhere; or

(iii) any business trust which has been investigated for a breach of any law or regulatory requirement governing business trusts in Singapore or elsewhere; or

(iv) any entity or business trust which has been investigated for a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere.

(k) Whether he has been the subject of any current or No past investigation or disciplinary proceedings, or has been reprimanded or issued any warning, by the Monetary Authority of Singapore or any other regulatory authority, exchange, professional body or government agency, whether in Singapore or elsewhere?

PG PG 186 187 This page has been intentionally left blank. This page has been intentionally left blank. This page has been intentionally left blank. SBS TRANSIT LTD (Incorporated in the Republic of Singapore) (Co. Reg. No.: 199206653M)

PROXY FORM IMPORTANT ANNUAL GENERAL MEETING 1. The twenty-eighth Annual General Meeting (the “AGM”) of the Company is being convened and held both physically at 205 Braddell Road, Singapore 579701 and by electronic means pursuant to the COVID-19 (Temporary Measures) (Alternatives Arrangements for Meetings for Companies, Variable Capital Companies, Business Trust and Debenture Holders) Order 2020. 2. Due to the Government’s prevailing regulations to prevent the spread of COVID-19, the number of member allowed to attend the AGM in person is kept at 25 and the remaining is to attend via live webcast. A member (whether individual or corporation) must appoint the Chairman of the Meeting as his/her proxy to attend, speak and vote on his/her/its behalf at the AGM if such member wishes to exercise his/her/its voting rights at the AGM. 3. CPF/SRS investors who intend to exercise the voting rights attached to their SBS Transit Ltd shares purchased using their CPF monies are requested to contact their respective CPF/SRS Approved Nominees. 4. By submitting an instrument appointing a proxy(ies) and/or representative(s), the member accepts and agrees to the personal data privacy terms set out in the Notice of Annual General Meeting dated 25 March 2021. 5. Please read the notes overleaf which contain instructions on, inter alia, the appointment of the Chairman of the Meeting as proxy to attend, speak and vote on his/her/its behalf at the AGM.

I/We (Name) (NRIC/Passport Number) of (Address) being a member/members of SBS Transit Ltd (the “Company”) hereby appoint the Chairman of the Annual General Meeting (“AGM” or “Meeting”), as *my/our proxy to attend, speak and to vote for *me/us on *my/our behalf, at the 28th AGM of the Company to be held at Singapore the Auditorium of ComfortDelGro Headquarters, 205 Braddell Road, Singapore 579701 on Thursday, 29 April 2021 at 10:00 a.m. and at any adjournment thereof to vote for, against or abstain from the Resolutions to be proposed at the AGM as indicated hereunder.

* Delete where inapplicable

If you wish the Chairman of the Meeting as your proxy to cast all your votes “For” or “Against” the relevant Resolution, please tick (√) within the box provided. If you wish the Chairman of the Meeting as your proxy to exercise your votes for both “For” and “Against” the relevant Resolution, please indicate the number of shares in the relevant boxes provided below. Alternatively, if you wish the Chairman of the Meeting as your proxy to abstain from voting for the relevant Resolution, please either tick (√) within the box or indicate the number of shares in the relevant box provided.

No. of No. of Votes No. of Votes No. Resolutions Votes For Against Abstained Ordinary Business 1. Adoption of Directors’ Statement and Audited Financial Statements for the year ended 31 December 2020 2. Declaration of Final Dividend for the year ended 31 December 2020 3. Approval of Directors’ Fees amounting to $517,465 for year ended 31 December 2020 4. Re-election of Professor Lim Seh Chun as a Director and his continued appointment as an Independent Non-Executive Director 5. Approval of Professor Lim Seh Chun’s continued appointment as an Independent Non-Executive Director by shareholders (excluding Directors, Chief Executive Officer and their associates) 6. Re-appointment of Auditors and authorising Directors to fix their remuneration Special Business 7. Authority to issue shares under the SBS Executive Share Scheme 8. Adoption of Share Buy-Back Mandate

Dated this day of 2021 Total Number of Shares Held in (Note 1) : No. of Shares (a) CDP Register (b) Register of Members

Signature(s) of Member(s) / Common Seal

IMPORTANT : PLEASE READ NOTES OVERLEAF Glue all sides firmly. Stapling and spot sealing are disallowed. are sealing spot and Stapling firmly. sides all Glue Fold alongthisline 9. 8. 7. 6. 5. 4. 3. 2. 1. NOTES 10.

The Companyshallbeentitledtoreject theinstrumentappointingapr Where aninstrumentappointingtheChairmano attorney oradulyauthorisedofficer, inaccordance withSection179of theCompaniesAct,Chapter50of Singapore. Where theinstrumentappointingaproxy orproxies isexecuted byacorporation, itmustbeexecuted eitherunderitscommonsealorthehandof its The instrumentappointingtheChairmanof theMeetingaspr in eithercase,by10.00amonMonday, 26April2021. c. The pro The Chairmanof theMeeting,aspr “Relevant intermediary”hasthemeaningascribedtoitinSection181of theCompaniesAct,Chapter. 50of Singapore. A memberwhoisarelevant intermediaryisentitledtovotea their votesnotlessthan7workingdaysbefore theAGM by10.00amon20April2021. CPF orSRSinvestorswhowishtoappointtheChairmanof theMeetingaspr that resolution willbetreated asinvalid. voting, orabstentionsfrom voting,inrespect of aresolution intheform of proxy, failingwhichtheappointmentof theChairmanof theMeetingasproxy for Where amember(whetherindividualorcorpora of theMeetingasproxy inorder tovote. Due totheGovernment’sprevailing r be deemedtorelate toalltheshares heldbythemember. registered inhis/hernametheRegisterof Members,he/sheshould inserttheaggregate numberof shares. Ifnonumberisinserted,thisform of proxy will Members of the Company, he/she should insert that number of shares. If the member has shares entered against his/her name in the Depository Register and The CentralDepository(Pte)Limited),he/sheshouldinsertthat numberof shares. Ifthememberhasshares registered inhis/hernametheRegisterof A membershouldinsertthetotalnumberof shar The CentralDepository(Pte)LimitedtotheCompany. shares entered againsthisnameintheDepositoryRegisterasat 72hoursbefore thetimeappointedfor holdingtheAnnualGeneralMeeting,ascertifiedby in theDepositoryRegister, theCompanymayreject theinstrumentappointingaproxy orproxies ifthemember, being theappointor, is not showntohave intentions of theappointorare notascertainablefrom theinstructionsof theappointorspecifiedoninstrument.Inaddition,incaseof shares entered be treated asinvalid. a dulycertifiedcopythereof must(failingprevious registration withtheCompany)belodgedinstrumentof proxy, failingwhichtheinstrumentmay b. a.

If submittedelectronically If submittedbyelectronic mail,besentto If submittedbypost,bedepositedat theCompany’sr xy form mustbesubmittedinthefollowing manner: , belodgedat theCompany’sAGM pre-registration site,www.conveneagm.sg/SBS_AGM2021. oxy, neednotbeamemberof theCompany. egulations toprevent thespread of COVID This flapisforsealing. Glueallsidesfirmly. Staplingandspot sealingare disallowed. [email protected]; or te) appointstheChairmanof theMeetingashis/her/itsproxy, he/she/itmustgivespecificinstructionsasto f theMeetingasproxy issignedonbehalfof theappointorbyanattorney, theletterorpowerof attorney or es held.Ifthememberhasshares entered againsthis/hernameintheDepositoryRegister(maintainedby THE COMPANY SECRETARY egistered office at 205BraddellRoad,Singapore 579701;or t theAGM mustappointtheChairmanof theMeetingtovoteat theMeeting. oxy mustbeunderthehandof theappointororof his/herattorney dulyauthorisedinwriting. 205 BraddellRoad Singapore 579701 SBS Transit Ltd oxy orproxies whichisincomplete,improperly completed,illegibleorwhere thetrue oxy shouldapproach theirrespective CPForSRSapproved nomineestosubmit -19, memberswhoattend themeetingphysicallymustappointChairman postage stamp Affix

Glue all sides firmly. Stapling and spot sealing are disallowed. PLEASE NOTE THAT THE TWENTY-EIGHTH ANNUAL GENERAL MEETING OF SBS TRANSIT LTD WILL BE HELD ON THURSDAY, 29 APRIL 2021 AT 10.00AM VIA ELECTRONIC MEANS AND AT:

AUDITORIUM COMFORTDELGRO HEADQUARTERS 205 BRADDELL ROAD SINGAPORE 579701 SBS Transit Ltd

205 Braddell Road Singapore 579701

Mainline (65) 6284 8866 Facsimile (65) 6287 0311 www.sbstransit.com.sg Company Registration No. 199206653M